GST Council Meeting Today :
The Goods and Services Tax (GST) Council holds paramount importance in India’s economic framework. Established under Article 279A of the Indian Constitution, the GST Council is a vital decision-making body responsible for regulating the GST regime in India.
The Council consists of the Union Finance Minister as the Chairperson, along with Ministers of Finance or Taxation from all states and union territories. Today’s GST Council meeting is especially significant due to various economic factors, including inflation, post-pandemic recovery, and the changing global economic landscape.
Bajaj Housing Finance IPO GMP Review 2024 : best Data-Based Forecast for the Future.
Key Highlights from the 54th GST Council Meeting
The GST Council, chaired by Finance Minister Nirmala Sitharaman, is meeting today to discuss several key issues.
The Council is expected to consider lowering the GST rate on life and health insurance premiums from the current 18%, which could reduce policyholders’ insurance costs.
They will also discuss exempting foreign airlines’ head offices from GST on imported services received without consideration, potentially reducing their tax burden.
Additional topics include potential GST reductions for cancer drugs, exemptions for electricity meter services, and support for the real estate and metal industries, benefiting property buyers and students.
The Council will review changes related to casinos, online gaming, and horse racing, following the 51st GST Council’s decision to impose a 28% GST rate starting October 1, 2023.
Central and state tax officials are expected to present a detailed “status report” on the collection of GST revenue from the online gaming industry both pre and post October 2023.
The online gaming companies have raised concerns regarding the 28% GST rate and the issuance of retrospective tax notices, amounting to over Rs 1.12 lakh crore in GST liabilities
Real means Context of GST Council
The GST Council was formed in 2016 to bring uniformity to India’s indirect tax structure. Before GST, India had a fragmented tax system where both the Central and State governments imposed multiple indirect taxes such as excise duty, VAT, service tax, etc. The introduction of GST streamlined the tax system, subsuming these into a single, unified tax regime.
Since its inception, the GST Council has held multiple meetings to address key issues such as tax rate revisions, exemptions, compliance matters, and adjustments based on economic conditions. Each meeting is seen as critical in maintaining a balance between the country’s economic goals and the concerns of various states.
The types of Best Insurance in Bharat 2024
Key Agendas in Today’s GST Council Meeting
Today’s GST Council meeting is expected to cover a wide range of critical issues that will significantly impact businesses, consumers, and government revenues. The agenda includes:
1. *Rate Rationalization*: There are ongoing discussions on rationalizing GST rates to address revenue shortfalls in some states while ensuring that consumers are not overburdened by high taxes. This has become particularly important in the current inflationary environment.
2. *Compensation to States*: One of the most pressing issues for the Council is the extension of compensation to states. The five-year compensation period, promised to states to offset revenue losses after the implementation of GST, ended in June 2022. Several states have been pushing for an extension, given that they are still facing revenue deficits.
3. *Bringing Fuel Under GST*: This topic has been debated for years. With skyrocketing fuel prices, there is renewed pressure to bring petroleum products under the GST regime. However, doing so would result in significant revenue loss for states, and a consensus has not been reached so far.
4. *Tax Evasion and Compliance Measures*: The Council is expected to discuss steps to curb tax evasion. With advances in technology, there are ongoing efforts to enhance compliance through more stringent checks and digitization of records.
5. *E-Invoicing and IT System Upgrades*: E-invoicing has been a major compliance reform in the GST regime, helping reduce tax evasion and improve transparency. Today’s meeting will focus on extending e-invoicing to smaller businesses and strengthening the IT infrastructure to manage the increasing volume of transactions.
6. *GST on Online Gaming, Casinos, and Horse Racing*: This is another contentious issue, where there have been demands to fix uniform tax rates across online gaming, casinos, and horse racing. While some sections argue for a 28% tax slab, others call for differential treatment based on skill and chance.
Rate Rationalization and Revenue Mobilization
The issue of *rate rationalization* has been a recurring theme in the GST Council meetings. The existing GST structure comprises four tax slabs: 5%, 12%, 18%, and 28%. In addition, there are some items taxed at 0%, and luxury goods that attract cess. However, there is increasing pressure to simplify this structure to boost revenue collections and reduce compliance burdens.
The *15th Finance Commission* recommended rationalizing the tax rates to a three-slab system, which would reduce the 12% and 18% slabs into a single middle slab. This would not only make compliance easier but also help in improving tax buoyancy. However, there is resistance from some quarters, as certain states fear a reduction in revenue from essential goods and services.
Today’s meeting is expected to deliberate on this complex issue, balancing the need for higher revenues with the necessity of avoiding inflationary pressures on essential goods.
Extension of Compensation to States
The GST compensation mechanism was introduced as part of the GST reforms to address concerns from states regarding potential revenue losses. Under this system, the Central government promised to compensate states for any revenue loss for a period of five years from the date of GST implementation. The compensation period expired in June 2022, and states are now requesting an extension, citing significant revenue deficits.
Several states, particularly those with significant revenue dependence on indirect taxes such as liquor and fuel, have argued that the economic disruptions caused by the COVID-19 pandemic have severely impacted their revenues. Extending the compensation would provide them with some financial relief as they work toward economic recovery.
The Central government, however, is constrained by its own fiscal pressures and the need to maintain fiscal discipline. Discussions around this issue are likely to dominate the meeting, with various proposals on how to balance state and central concerns being discussed.
Inclusion of Petroleum Products Under GST
The inclusion of *petroleum products* under the GST regime is another major agenda item in today’s meeting. Currently, petroleum products such as petrol, diesel, aviation turbine fuel, and natural gas are outside the purview of GST and are taxed separately by both the central and state governments. These products contribute significantly to state revenues, and many states are hesitant to bring them under GST.
However, with rising fuel prices hurting consumers and businesses, there has been renewed demand to bring these products under GST, which could significantly reduce their prices by eliminating the cascading effect of multiple taxes. Today’s meeting is likely to discuss the feasibility of this move, but any decision would require consensus from all states, many of which remain reluctant due to the potential revenue loss.
Tax Evasion and Compliance
*Tax evasion* has been a persistent problem in the GST regime, particularly among small and medium-sized businesses. The government has made several efforts to curb evasion, including the introduction of e-invoicing, stricter return filing norms, and penalties for non-compliance. Today’s meeting will likely focus on further strengthening these measures.
One of the most significant reforms in this area is the implementation of *e-invoicing*, which has already been made mandatory for businesses with an annual turnover above ₹10 crore. By requiring businesses to generate invoices electronically and report them in real-time to the GST Network (GSTN), the government aims to reduce evasion and improve transparency in the tax system.
Additionally, the Council may discuss further tightening the rules around *input tax credit (ITC)*. There have been several cases where businesses have claimed ITC on the basis of fake invoices, leading to revenue losses. Strengthening ITC verification processes could be another important topic in today’s meeting.
Best Describe the Finance function in 2024
HDFC Bank Share Price analysis 2024 Impact of share market.
GST on Online Gaming, Casinos, and Horse Racing
Another issue that is likely to spark debate is the taxation of *online gaming, casinos, and horse racing*. There has been growing demand from certain quarters to impose a uniform 28% GST rate on all forms of gambling and betting, arguing that these are luxury activities and should be taxed at the highest rate.
However, the gaming industry, particularly the online gaming sector, has opposed this move, arguing that not all gaming activities should be treated the same. Games of skill, such as fantasy sports, are distinct from games of chance like lotteries and casinos, and should be taxed at a lower rate. The Council will need to navigate these competing interests as it decides on a tax structure that balances revenue considerations with the growth potential of the online gaming industry.
Technological Upgrades and E-invoicing
The discussion on *technological upgrades* within the GST framework is another key point on today’s agenda. With increasing transaction volumes and the expansion of e-invoicing to smaller businesses, there is a growing need to strengthen the *GSTN IT infrastructure*.
The introduction of *e-invoicing* has been a game-changer for improving transparency and reducing tax evasion. However, as more businesses come under its purview, there is a need to ensure that the IT system can handle the increased load and operate smoothly. The Council will likely discuss further upgrades to the GSTN system and the extension of e-invoicing to smaller businesses.
The GST Council meeting today is set to address a wide range of issues that will have far-reaching implications for India’s economy. From rate rationalization to compensating states and addressing tax evasion, the Council’s decisions will shape the future trajectory of India’s indirect tax regime. With competing interests and economic pressures at play, the outcomes of today’s
Yes, the GST Council meeting is happening today, September 9, 2024. It is the 54th meeting of the Council, chaired by Union Finance Minister Nirmala Sitharaman. The meeting is being held in Delhi.
Some of the key topics on the agenda include:
* Insurance premium taxation: The Council is expected to discuss the potential reduction of GST rates on life and health insurance premiums.
* Rate rationalization: The Council will review recommendations from the Group of Ministers on rate rationalization.
* Online gaming: The Council will discuss the taxation of online gaming, including the 28% GST rate that was recently imposed on entry-level bets.
You can find more information about the GST Council meeting in the following articles:
* Livemint: https://www.livemint.com/economy/gst-council-meeting-live-update-nirmala-sitharaman-may-cut-gst-health-insurance-11725860449788.html
* The Economic Times: https://m.economictimes.com/news/newsblogs/gst-council-meeting-live-updates-nirmala-sitharaman-announcements-health-insurance-online-gaming-tax-cut-54th-gst-council-meet-9th-august/liveblog/113189237.cms
* India Today: https://www.indiatoday.in/business/story/54th-gst-council-meet-today-life-insurance-to-report-on-online-gaming-what-to-expect-2596249-2024-09-09
