Key Issues and Agenda of 53rd GST Council Meeting Scheduled on June 22 at New Delhi.
Union Finance Minister Nirmala Sitharaman is set to chair the much-anticipated 53rd GST Council meeting on June 22 in New Delhi, a day after taking office. The council-nominated Fitment Committee will convene beforehand to deliberate on several critical issues before presenting its recommendations to the council.
Fitment Committee’s Agenda
The Fitment Committee will consider several important proposals, including:
1. Bringing Aviation Turbine Fuel (ATF) and Natural Gas Under GST:
The Petroleum Ministry’s proposal to include ATF under GST at 5% and natural gas at either 12% or 18% is a key item on the agenda.
2. Clarity on Input Tax Credit (ITC):
The committee aims to resolve ongoing issues in several sectors regarding ITC claims.
3. Tax Applicability on Metal and Steel Scrap:
A proposal addressing the tax on metal and steel scrap, which the industry has awaited for over a year, is likely to be discussed.
4. Correction of Inverted Duty Structure:
The committee will consider a proposal to rectify the inverted duty on 14 items, including textiles, leather, pharma, and engineering goods. This proposal, submitted by DPIIT, has been pending for detailed discussion.
GST Council’s Deliberations
As the GST Council meets for the first time in nearly nine months, several pending agenda items are expected to be addressed. Key points include:
1. Rate Rationalization:
The council might revise the existing Group of Ministers (GoM) on Rate Rationalization, headed by UP Finance Minister Suresh Khanna, and set a new timeline for a detailed report.
2. GST on Online Gaming:
Despite industry push for a review, the council may maintain the 28% GST on actionable claims in online gaming.
3. Input Tax Credit on Telecom Services:
Clarification on ITC applicability for telecom services and spectrum charges is anticipated.
4. Ease of Doing Business:
The council will propose measures to enhance compliance and simplify GST rules and laws, aiming to improve the ease of doing business in India.
5. Foreign Airlines and Shipping Lines:
The council may exempt services rendered between head offices abroad and local branches in India from GST, addressing concerns of foreign airlines and shipping companies.
6. Mandatory Biometric Aadhaar-Based Authentication:
A timeline for the nationwide rollout of mandatory biometric Aadhaar-based authentication for GST taxpayers may be approved to eliminate shell companies and invalid GST IDs.
Industry and Experts’ Expectations
Industry experts are hopeful that the 53rd GST Council meeting will address several critical issues:
1. Rate Rationalization:
MS Mani, Partner at Deloitte India, emphasizes the importance of rate rationalization discussions and the inclusion of low-impact petroleum products like natural gas under GST.
2. Clarifications on Taxation:
Mahesh Jaising, also a Partner at Deloitte India, highlights the need for clarity on related party transactions, ESOP taxation, and the potential introduction of an amnesty scheme to resolve initial-year disputes.
3. Taxability of Online Gaming and Other Sectors:
Abhishek Jain, Indirect Tax Head & Partner at KPMG, expects clarifications on the taxability of the online gaming sector, ESOPs, and corporate guarantees, along with rate-related issues due to recent litigations.
4. Review of Valuation Rules and IDS:
Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co., stresses the need to address the inverted duty structure for various sectors and rationalize GST rates on commonly used items.
The 53rd GST Council meeting is poised to address a plethora of issues, aiming to streamline GST processes, enhance compliance, and respond to industry demands for a more efficient tax system.
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