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"The problem behind GST rate rationalisation is the math around it. Its a massive exercise on so many products and services. There are new ministers in the GST Council, so perspectives change. I think we are no where near to rate rationalisation. It is a work in progress, but it is years away," Rajat Bose, partner at law firm Shardul Amarchand Mangaldas.
GST exemption on hostels outside educational institution up to Rs 20,000 per person per month will be a big concession, keeping in mind the interest of students coming from rural areas, said Ved Jain, managing partner at VJA Legal.
The defined monetary limits to appeals on GST cases is a good start, said Rajat Bose, partner at law firm Shardul Amarchand Mangaldas.
"A lot of litigation will come once GSTAT is set up. This move is good where government can limit litigations in the coming years. But revenue secretary saying the limit does not apply in policy matters, this needs to be looked at," he said.
"The waivers on penalties and interest on cases till FY20 clearly shows the intent is to resolve disputes. The key reforms were missing but it was not expected this time. We have to check the fineprint of the Council meeting," said Saurabh Agarwal, tax partner at EY India.
"The GST Council has suggested monetary limits for each level of appeal. The caveat is if there is a policy matter involved the government would still have right to appeal even if the amount is smaller than limit. If somebody is granted relief over classification issue, it can be treated as policy issue," SC Garg, former finance secretary, told NDTV Profit.
"The Council focused on easing the life of taxpayers by reducing burden of penalties and interest and some rationalisation on hostel rent taxation. Policy issues were not taken but matters dealing with basic taxpayer concerns were taken," SC Garg, former finance secretary, told NDTV Profit.
"The intent is to make GST assesses' life easier, working towards lesser compliances. Notices are not being sent out left, right and centre. Only 1.96% of all active tax assesses or 1.14 lakh assesses have been sent any notice from CGST."
Anti-profiteering cases to shift to GST Appellate Tribunal and sunset for filing date is April 1, 2025.
A decision is taken to shift hearing of such cases from Competition Commission to GSTAT when it becomes functional.
Nirmala Sitharaman said the provision to bring fuel like petrol and diesel under the GST ambit is present in the GST Act and the onus is upon states to build consensus and agree to proceed on this.
"The Pre-budget discussion held today was good. Request was made for Department of North Eastern Affairs to work together with states there. State specific infrastructure incentives were also discussed. States urged for devolution to be taken up at Finance Commission level."
"The Pre-budget discussion held today was good. Request was made for Department of North Eastern Affairs to work together with states there. State specific infrastructure incentives were also discussed. States urged for devolution to be taken up at Finance Commission level."
Nirmala Sitharaman. (Source: PIB)
The Andhra Pradesh finance minister noted in the council meeting that physical verification weeds out fake registration successfully therefore the step to operationalise it Pan-India has been taken. The operationalisation of the Aadhaar based authentication will start now and be implemented in a phased manner, Sitharaman said.
The GST on online gaming did not come for discussion and was not part of the agenda, Nirmala Sitharaman said.
The Deputy Chief Minister of Bihar Samrat Chaudhary has been given charge for GoM (Group of Ministers) on rate rationalisation committee.
Service by way of student hostel accommodation is presently exempted if hostels are within an educational institution. Now, hostels outside the institution are also being exempted. But the measure of relief can be only Rs 20,000 per person per month. Hostels only include where users stay for at least 90 days.
The GST Council recommended 12% GST on all solar cookers, irrespective of single or dual energy source.
The sale of platform tickets, cloak room services, waiting rooms to be exempted from GST. Intra-railways supplies will be exempted from GST.
The GST Council recommended uniform rate of 12% on all milk cans, irrespective of material. It also recommended uniform GST rate of 12% on all carton boxes of corrugated and non-corrugated paper, will particularly help apple growers of Himachal Pradesh and Jammu and Kashmir.
All types of sprinklers, including fire water sprinklers, will attract 12% GST.
Biometric-based Aadhaar verification to be rolled out pan-India to weed out fraudulent ITC claims via fake invoices, announced Sitharaman.
To allow taxpayers to amend or add declared or undeclared amounts in GSTR-1, the Council has recommended a new functionality by GSTR 1A form.
For small taxpayers, the GST Council recommended extending time limit for GSTR 4 filing from April 30 to June 30. This will apply FY25 onwards.
To reduce govt litigation, Council has recommended monetary limit for Rs 20 lakh for GST Appellate Tribunal, Rs 1 crore for High Court and Rs 2 crore for SC for filing of appeals by the department, Sitharaman said.
The Council has recommended maximum amount of pre-deposit for filing an appeal before Appellate Tribunal has been reduced to Rs 20 crore from Rs 25 crore for CGST and SGST respectively.
GST Council recommended waiving interest, penalties in notices that have been issued under section 73 of GST Act. Interest in cases not involving fraud, suppression during FY17-18, 18-19, 19-20 to be waived, however full demand amount has to be paid, announced Sitharaman.
"Lot of issues on which fitment and legal committee had worked on, only some agenda was taken up. One or two matters of urgency which states had in mind was taken up," Finance Minister Nirmala Sitharaman said.
The next GST Council meeting will be held before the end of August where unfinished, un-tabled agenda will be taken up then, she said.
Among the various expectations, the industry is hoping for technical clarity on the applicability and valuation of the tax levy on corporate guarantees and ESOPs given to employees. The last council meeting set the tax levy on a corporate guarantee from a parent company to a subsidiary company at 18% GST on 1% of the guaranteed amount or the actual consideration, whichever is higher.
The expectation of including petroleum products has also gained momentum ahead of the GST Council meeting. However, the central government has often maintained that the inclusion of petroleum products within the GST ambit will be a subject that requires state-level consensus across the board.
The next GST council meeting will be conducted post the Union budget in July, said Andhra Pradesh Minister Payyavula Keshav. He sought financial package for Amaravati capital construction and fertiliser exemption referred to GoM on rate rationalisation.
The 53rd GST Council meeting is about to come to an end in a few minutes.
After reconstituting late in 2023 the GST council's GoM (group of ministers) under Uttar Pradesh Finance Minister Suresh Kumar Khanna, a smaller body on rate rationalisation, has yet to deliver its report. It is expected that some rate reductions recommended by the fitment committee may be taken up.
However, the rationalisation of the rate slabs in terms of reducing the number of slabs will be a longer exercise. Currently, there are four slabs beyond the nil rate, such as 5%, 12%, 18% and 28%.
Karnataka Finance Minister Krishna Byre Gowda sought releasing Rs 5,300 crore of already announced assistance for Upper Bhadra Water Project and declare it a national project. He also sought inclusion of cesses and surcharges into a divisible pool so that states get their rightful share in central taxes.
Gowda also sought an increase in the central share to beneficiaries in housing schemes from Rs 1.5 lakh to Rs 5 lakh in urban areas and from Rs 1.2 lakh to Rs 3 lakh in rural areas.
(Source: PTI)
Rajasthan’s Deputy CM Diya Kumari sought state-specific incentives such as increasing allocation for Eastern Rajasthan Canal Project and Jal Jeevan Mission, certain national highways and railway lines.
Source: Media interaction post meeting
In May 2024, the gross Goods and Services Tax collections increased 10% year-on-year to Rs 1.73 lakh crore. The May figures were driven by a strong increase in domestic transactions at 15.3% and a slowing of imports by 4.3%
After accounting for refunds, the net GST revenue for May stood at Rs 1.44 lakh crore, reflecting a growth of 6.9% as compared with the same period last year. GST collections in April crossed the Rs 2-lakh-crore mark for the first time, since the rollout of the indirect tax reform in July 2017. GST collections are released with a one-month lag.
Gross GST revenue: Rs 1.73 lakh crore.
Central GST: Rs 32,409 crore.
State GST: Rs 40,265 crore.
Integrated GST: Rs 87,781 crore, including Rs 39,879 crore collected on import of goods.
Cess: Rs 12,284 crore, including Rs 1,076 crore, collected on the import of goods.
Finance Minister Nirmala Sitharaman will hold a press conference to share the updates from the 53rd GST Council Meeting at 6:00 p.m.
You can watch the press conference live on NDTV Profit YouTube Channel and follow NDTV Profit website for all the latest updates related to the meet.
Kerala Finance Minister KN Balagopal said changes introduced in the calculation of 'Borrowing Ceiling' such as inclusion of public account and the borrowings of state-owned enterprises has limited borrowing potential. The southern state has sought reversal of the policy. He noted Kerala is losing Rs 5,710 crore in fiscal 2024 and fiscal 2025 due to the measure.
Kerala Finance Minister KN Balagopal has urged a special package of Rs 24,000 crore over 2 years to tide over "liquidity stress" for the state and a special capital investment of Rs 5,000 crore for Vizhinjam port development.
He also requested another Rs 5,000 crore for financing infra projects such as Calicut-Wayanad tunnel road and early clearance of semi-high speed railway line.
Nirmala Sitharaman chaired the the pre-budget consultations with the finance ministers of states and union territories in New Delhi, today.
The government reiterated support to states through timely tax devolution, Finance Commission grants, and arrears of GST compensation. Sitharaman urged states to avail untied portion of 50-year-interest free loan scheme.
Stakeholders are expecting GST levied on fertiliser to be reduced or a correction in the inverted duty structure. This arrangement leads to higher GST on input items than that on the finished product.
Currently, fertiliser attracts 5% GST, while key inputs such as ammonia (used in the production of P&K fertiliser) and packaging material attract 18%, leading to an inverted duty structure where the input tax is higher than the output tax of the final product.
The 53rd meeting of the GST Council has begun in Delhi with Finance Minister Nirmala Sitharaman chairing the ministers' gathering.
#WATCH | Union Finance Minister Nirmala Sitharaman chairs the 53rd GST Council meeting, in Delhi. pic.twitter.com/QwAv02b5vY
— ANI (@ANI) June 22, 2024
After eight months, the Goods and Services Tax Council is meeting in Delhi on Saturday. This is the first meeting of the all-powerful Council since NDA government returned to power for a third time, and comes just of the full Union Budget, likely to be tabled next month.
On the agenda for the meeting are key indirect tax priorities, ranging from industry clarifications to likely subjects like tax demand notices for gaming companies.
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