Bharatiya Janata Party (BJP) leader Nirmala Sitharaman arrives to assume charge as the Union Finance Minister, at the Ministry of Finance in New Delhi on June 12, 2024.
| Photo Credit: ANI
The Centre has decided to convene a meeting of the Goods and Services Tax (GST) Council on June 22, eight-and-a-half months after its last meeting, the Finance Ministry said on June 13, 2024.
“The 53rd meeting of the GST Council will be held on 22nd June, 2024 at New Delhi,” a ministry statement informed.
The Council that is generally expected to meet every quarter, has met just six times since 2022.
The agenda for the upcoming meeting is not known yet but State Finance Ministers can be expected to flag suggestions for the indirect tax regime that can be incorporated in the Union Budget likely to be presented next month.
Industry will also be keen for signals from the Council on the revival of a plan to restructure the complex multiple-rate tax structure, now that GST revenues have risen significantly, along with a promised review of the 28% levy on bets made in online gaming, casinos, and horse racing.
Consumers and industry would also be eyeing some visibility on the future of the GST Compensation Cess that was originally meant to be levied for the first five years of the GST regime that began in July 2017. The levy of the Cess, used to recompense States to come on board, had been extended after the pandemic.
At its last meeting held on October 7, 2023, the Council, headed by the Finance Minister, had initiated discussions on a “perspective plan” to impose a cess or surcharge on top of GST levies after March 2026, when the GST Compensation Cess is due to expire. The Council had then decided to meet in the future to discuss a replacement levy for the Cess and how those funds could be used.
Implementation of Bommai report
To rationalise and rejig multiple GST rates and simplify the tax structure, the Council had set up a group of ministers (GoM) under former Karnataka Chief Minister Basavaraj Bommai in late 2021. Some initial recommendations of the ministerial panel to withdraw exemptions and concessional rates on several items had been accepted by the GST Council in June 2022.
However, the panel did not move forward on its broader rate rationalisation mandate, with officials citing high inflation and revenue considerations as key factors to put the exercise on the backburner. The GoM also remained in suspended animation after Mr. Bommai’s party lost the Karnataka assembly polls last May. The GoM was reconstituted in late 2023 with Uttar Pradesh Finance Minister Suresh Kumar Khanna as its convenor.
Apart from broader reforms to the indirect tax regime, tax experts also hope for resolution of some long-pending operational issues and challenges at the upcoming meeting.
“Multiple clarifications are being looked after to including taxability for the online gaming sector before October, taxability of ESOPs, corporate guarantee taxability, and various rate-related clarifications are also anticipated due to recent litigations,” said Abhishek Jain, indirect tax head and partner at KPMG.
