Introduction: 52nd GST Council Meeting
The 52nd GST Council meeting is scheduled to take place on October 7, 2023, in New Delhi, with Union Finance Minister, Mrs. Nirmala Sitharaman, serving as the chairperson. This meeting comes about two months after the 51st GST Council meeting held on August 2, 2023. The council often discusses potential changes in tax rates for various goods and services.
This could include reviewing rates for essential commodities, luxury items, and other categories. Let’s explore the expectations and significant decisions that might be discussed in this upcoming GST Council meeting.
The GST Council is likely to approve the exemption of millet-based food products from GST. This move aligns with the government’s initiative to promote millets. The Fitment Committee has recommended exempting powdered millet from GST when sold in loose form, with a millet content of 70%. Additionally, pre-packaged and labeled food preparations with millet flour as the base might see a reduced GST rate, likely lowered to 12% from 18%.
Uniform Cess on Cigarettes & Bidi
The decision on imposing a uniform cess on cigarettes and bidi has been deferred by the Fitment Committee. The tobacco industry’s proposal for a uniform additional compensation cess on cigarettes and bidis, along with adjustments for different sizes of cigarette sticks, has not been accepted. Hence, it is expected that there will be no change in the current structure.
Exemption on Govt Horticulture contracts
The council is likely to consider an exemption of tax from horticulture services given on contract to maintain public parks, lawns, and public gardens, where value of goods is below 25%.
Exemption of ENA from GST
The Council is expected to exempt Extra Neutral Alcohol (ENA), both grain-based and molasses-based, from GST when supplied for the manufacture of alcoholic liquors. Given that alcohol is outside the GST purview, states are likely to be urged to exempt ENA from VAT when supplied for industrial purposes.
Taxing Personal/Corporate Guarantees for Loans
The council is likely to discuss levying GST on personal guarantees provided by directors and corporate guarantees in favor of subsidiary companies. This is being considered a related party transaction and might be subject to an 18% GST.
Appointment of Chairman & Members to GST Appellate Tribunal
GST Imposition on Redevelopment Projects
The council is expected to provide clarifications regarding GST imposition on redevelopment projects by builders.
Shifting of All Indian Railways Services from RCM to FCM
It is expected that the council is going to take up a proposal on shifting of all services of Indian Railways from Reverse Charge Mechanism (RCM) to Forward Charge Mechanism (FCM).
Clarifying Taxation of Co-Location Services & Data Center Services
As per sources, the council is likely to be considering a GST rate of 18% for Co-Location services and Data Center services only if the center provides only the physical space to the overseas clients on rent basis, not any data storage and maintenance services. Providing data storage and maintenance services will be treated as exports and will be taxable accordingly.
Budgetary Support for Units in Hilly States
The GST Council is likely to discuss over a proposal upon the scope of budgetary support for units in hilly states.
GST on Public Contracts on Govt Constructions
The apex panel in the upcoming meeting is expected to discuss and review upon the GST applicability on various public contracts related to government constructions which are not for sale, like roads, bridges and industrial units.
Allowing additional Time for certain Appeals
It is expected that the council may take a decision to provide some additional time to file appeals in case of tax disputes under some specific cases.
Review of 28% GST on Online Gaming
The contentious issue of the 28% GST on online gaming, horse racing, and casinos is expected to be reviewed, considering the varying implementations across states.
Lowering GST on Motor Vehicles for the Visually Impaired
Discussions are likely to take place regarding reducing the GST rate from 28% to a concessional rate for motor vehicles purchased by the visually impaired.
Change in GST Registration Form
The council is expected to bring some changes in the GST registration forms, for incorporating One Person Company, and providing details of the place of supply in case of advertising services, Data Centre & Co-Location services and services provided through mail and courier.
No Reduction in GST Rate on EV Batteries
The GST Council is not considering a reduction in the GST rate on Lithium-ion batteries used in electric vehicle (EV), maintaining the status quo at 18%.
Tax Exemption to Institutes Imparting Flying Training
As the Fitment committee rejected the option, the council is not expected to take any decision on tax exemption to institutes imparting flying training.
Discussion on Taxation of Crypto Assets
In addition to the above expectations, minor rate restructuring of a few other items may also be discussed during the upcoming meeting. But, It is important to note that the actual agenda and discussions in the 52nd GST Council meeting may vary based on the prevailing economic and political context at the time of the meeting. For the most accurate and detailed updates on the meeting, please refer to the latest and information.
Follow the Link to access the Announcement of GST Council about the 52nd council meeting–https://gstcouncil.gov.in/52nd-meeting-gst-council-will-be-held-7th-october-2023-10-am-onwards-sushma-swaraj-bhawan
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