GST Council Meeting: 47th meeting of the GST Council begins, there may be changes in tax rates, and the central government would like to end the system of compensation

Posted on 28th Jun 2022 by rohit kumar

The GST Council started in Chandigarh on Tuesday. In the two-day meeting, issues such as a change in tax rates of certain items and relaxation in registration rules for small e-commerce suppliers along with compensation to states are likely to be considered.

 

Two reports will be presented by the Group of Finance Ministers of the states in the 47th meeting of the GST Council to be chaired by Finance Minister Nirmala Sitharaman. In this, the opposition-ruled states will strongly advocate for the continuation of compensation for revenue deficit along with rationalization of rates. At the same time, the central government would like to stop it citing the tight fiscal situation.

 

The Center had taken a loan of Rs 1.1 lakh crore in 2020-21 and Rs 1.59 lakh crore in 2021-22 to meet the shortfall in the compensation fund of states due to a fall in cess collection. In the 45th council meeting in Lucknow, Sitharaman had said that the system of giving compensation to the states for revenue shortfall will end in June 2022. The proposed tax rates by the officers' committee or fitment committee will also be considered in the meeting to be held in Chandigarh.

 

Uniform rate on prostheses and orthopedic implants

 

The GST Council meeting, which is being held after six months, may decide on imposing a uniform 5% GST on artificial limbs and orthopedic implants. The committee has recommended this. Apart from this, it has also been recommended to levy 5% GST on ropeway travel. At present, GST has to be paid on it at the rate of 18 percent.

 

28% GST on online gaming, casinos, horse racing

 

In the meeting to be held on June 28-29, 28 percent GST may be considered on online gaming, casinos, and horse racing. Discussion can be taken on the report submitted by the Group of Ministers constituted under the chairmanship of Meghalaya Chief Minister Conrad Sangma. The GoM, in its report, has recommended that all earnings from online gaming should be taxed. It also includes the entry fee paid by the player upon participation in the game. In the case of horse racing, the GoM has suggested that GST be levied on the entire amount deposited for placing bets.

 

These can also be discussed in the meeting

 

Five percent tax on e-vehicles: Clarification may be issued on GST rates for e-vehicles. In this, there can be a discussion on imposing 5% GST on e-vehicles equipped with or without batteries.

 

E-way bill mandatory for gold/precious stones: Council may make e-way bill and e-challan mandatory for inter-state movement of gold/precious stones valued at Rs.2 lakh and above. This arrangement will be for companies having an annual turnover of more than Rs 20 crore.

 

Relief in registration for small e-commerce suppliers: The GST Council may exempt small businesses from mandatory registration norms for using the e-commerce platform. Additionally, e-commerce suppliers with a turnover of up to Rs 1.5 crore will be allowed to opt for the composition scheme, which offers lower tax rates and simpler compliance.

 

Also Read: GST Council Meeting: A big decision may come on online skill gaming in the GST Council meeting, know how much tax will increase?