• Notification Date: 14-07-2023
• Notification No: N/A

GST Rate of Certain Items Might be Altered in the Next Council Meeting

The 50th meeting of the GST Council is scheduled to meet on July 11, Tuesday, in New Delhi. The meeting will be presided over by Union Finance Minister Nirmala Sitharaman. The council is scheduled to discuss new taxation rates of online gaming, defining multi-purpose vehicles, and enhancing regulations for registration and claiming Input Tax Credit (ITC). The last meeting of the Council was held on February 18, 2023.  

The GST Council is also likely to ascertain the new taxation rates for food and beverages sold in multiplexes, import rates of cancer drug Dinutuximab, and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases. Besides, satellite service launch may also become cheaper as the committee has recommended tax exemption on it. 

The Council is likely to provide for mandatory physical verification of the business premises of "high risk" applicants before granting of GST registration, as well as reduced time for submitting Pan-linked bank account details to GST authorities. 

1. Online gaming, casinos, and horse racing may become dearer. The GST committee has proposed to increase the taxation of online gaming, horse racing, and casinos.   

2. The committee has a broad agreement that a 28 per cent GST should be levied on all three supplies. However, Goa has said that an 18 per cent tax should be levied only on platform fees and contributions to the prize pool should be exempted from tax.  

3. MUVs and XUVs may become more expensive as the fitment committee has recommended that all utility vehicles (Multi Utility Vehicles or Crossover Utility Vehicles) would attract a 22 per cent cess.  

4. The fitment committee has urged the GST Council to clarify that food and beverages served in cinema halls, which is currently taxed at 18 per cent.  
  

Items that can become cheaper  

1. Import of cancer medicine Dinutuximab (Qarziba) by individuals for personal use attract a 12 per cent IGST. The fitment committee wants that rate to be revised.   

2. Also, medicines that costs Rs 36 lakh may get exempted from tax. 

3. The food and beverages, sold inside cinema halls, might become cheaper. Lobby group Multiplex Association of India has proposed to reduce the taxes on certain categories of food and beverages (F&B) sold inside cinema halls from the existing 18 per cent to 5 per cent. Movie tickets below Rs 100 are taxed at 12 per cent, while those above this limit attract an 18 per cent GST. 

4. Satellite service launch may also become cheaper as the committee has recommended tax exemption on it.  

5. A reduction in the GST rate to five per cent on imitation zari thread or yarn is also on the agenda. 

6. The tax on certain food items like papad and kachri might also be discussed. At present, the tax on non-fried snacks like papads and kachris, is levied at 18 per cent. The proposal is to remove it altogether or fix it at 5 per cent. 

Besides these, the GST Council is likely to decide on the TCS liability of suppliers engaged in e-commerce trading through the government's Open Network for Digital Commerce.  

Reimbursement of full CGST and 50 per cent IGST in 11 hill states under the 'scheme for budgetary support' is likely to come up.  

A new rule in GST law under which businesses would be required to explain the reasons for excess input tax credit (ITC) claimed or deposit the amount with the exchequer is likely to be discussed. 

The Law Committee, comprising tax officers from Centre and states, has opined that where the ITC availed in GSTR-3B return exceeds the amount of ITC available in accordance with the auto-generated statement GSTR-2B by a specified threshold, the registered person may be intimated on the portal about such difference and be directed to either explain the difference or pay the excess ITC along with interest.