• Notification Date: 05-10-2023
• Notification No: N/A

GST Council meeting to investigate Tax Exemption for Millets, Review Tax on Online Gaming

The Goods and Services Tax (GST) Council in its upcoming meeting on October 7 is likely to review the implementation of the 28 per cent levy on online gaming, horse racing and casinos as well as look into pending proposals for rate restructuring in items including millets and the setting up of the GST Appellate Tribunals.  According to sources, the GST Council chaired by Union Finance Minister Nirmala Sitharaman, is likely to approve exempting millet-based food products from GST. The move is significant given the government’s focus on popularising millets. The Council is also likely to review the GST rate for batteries of electric vehicles that are currently taxed at 18 per cent.  

Another key agenda of the GST Council is expected to be the setting up of the GST Appellate Tribunals. While the government has notified setting up of 31 Appellate Tribunals in 28 States and eight Union Territories in the country last month, procedural issues including the terms of reference for appointments of Chairman and members are still pending.    

The Centre and states are hoping to have the tribunals operational by the year end to take forward the large number of GST cases. According to industry body CII, the number of appeals against the orders of first Appellate Authorities has been rising sharply, and in the last two years moved up by more than double from 5,499 in 2020-21 to 11,899 cases in 2022-23. 

Meanwhile, the contentious issue of the 28 per cent GST on online gaming, horse racing and casinos is also expected to feature in the meeting with a review of implementation by the states. While the Centre has notified the implementation of the levy from October 1, there remains uncertainty about how it will be levied as a few states are yet to pass enabling legislations or promulgate ordinance for it. Industry has also sought clarification from the government on the issue. 

Sanjay Chhabria, Director, Indirect Tax, Nexdigm, noted that the constitutional scheme of GST warrants simultaneous levy of tax on supplies of goods and services by the Centre and the States. “Basis the previous GST council meetings, the amendments to the GST legislation enacted by the Parliament have come into force from 1 October 2023. However, the corresponding changes to the State and Union Territory GST legislations are yet to come into effect, and this could pose serious challenges to the taxpayers,” he said, adding that the GST Council could consider temporary suspension of implementation while simultaneously urging the member States to pass the amendments at the earliest.    

Industry body All India Gaming Federation had also written to the finance ministry seeking a deferment of the notifications.