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<keyword id="19896016" type="General" weightage="20" keywordseo="New-Delhi" source="keywords">New Delhi</keyword>: The 54th Meeting of the <keyword id="21275205" type="General" weightage="20" keywordseo="Goods-and-Services-Tax-Council" source="keywords" meta.keywordsubtype="org" meta.entityname="Goods and Services Tax Council" meta.hostid="261" meta.entityid="Goods and Services Tax Council">Goods and Services Tax Council</keyword> or GST Council, will be held on 9th September 2024 in New Delhi, the GST Council said in a post on social media platform "X" on Tuesday. On June 22, <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> Nirmala Sitharaman said that the next meeting of the GST Council will take place in mid to late August. The aim of this meeting will be to discuss the pending issues of the last meeting. The council is expected to discuss rate rationalisation and compliance, among others. The GST Council, consisting of the Union Finance Minister and representatives from all States and Union Territories, was established to make decisions on various aspects of GST, including <keyword id="20452955" type="General" weightage="20" keywordseo="tax-rates" source="keywords">tax rates</keyword>, exemptions, and administrative procedures. It played a crucial role in shaping the GST framework in India. The last meeting of the GST Council was held on 22 June 2024 this year. During the meeting, the council recommended relaxation to taxation, Input Tax Credit (ITC) claims and demand notices. The GST Council proposes exemptions for specific services offered by Indian Railways to the general public, as well as for intra-railway transactions. During the 53rd meeting of the council, it proposed an exemption for specific services offered by Indian Railways to the general public, as well as for intra-railway transactions. The sale of platform tickets and services such as retiring rooms, waiting rooms, cloakroom facilities, and battery-operated car services are now exempt from GST. The 53rd council meeting was marked by several key decisions aimed at easing the compliance burden and providing relief to taxpayers. "Today's <keyword id="20115983" type="General" weightage="100" keywordseo="GST-Council-meeting" source="keywords">GST Council meeting</keyword> has taken a lot of decisions on trade facilitation, easing compliance burden and relief to taxpayers in terms of compliance easing out," the Finance Minister had said. The GST Council recommended waiving interest penalties on demand notices issued under Section 73 of the GST Act for fiscal years 2017-18, 2018-19, and 2019-20. The Council, in its June 22 meeting, approved an extension for availing input tax credit (ITC) on any invoice or debit note. To curb government litigation, the Council has recommended setting monetary thresholds for filing appeals by departments: Rs 20 lakh for the GST appellate tribunal, Rs 1 crore for high courts, and Rs 2 crore for the Supreme Court. In a move to assist small taxpayers, the Council, in its last meeting, extended the deadline for furnishing returns from April 30 to June 30 for the fiscal year 2024-25 and subsequent years. The Council, in its last meeting, recommended the phased rollout of biometric-based Aadhaar authentication for GST registration applicants across India. The Council recommended a uniform GST rate of 12 per cent on all milk cans, regardless of their material (steel, iron, or aluminium), to eliminate disputes. The Finance Minister, during the last GST meeting, reiterated the central government's intent to bring petrol and diesel under the Goods and Services Tax (GST) framework. She highlighted that the groundwork for this inclusion was laid during the initial implementation of GST and emphasized that the decision now lies with the state governments. The central government has long maintained that incorporating petrol and diesel into GST would streamline tax rates and potentially reduce prices for consumers.

54th GST Council meeting to take place on September 9 in New Delhi

The <keyword id="19994390" type="General" weightage="20" keywordseo="GST-Council" source="keywords">GST Council</keyword> on Saturday decided to tweak <keyword id="20452955" type="General" weightage="20" keywordseo="tax-rates" source="keywords">tax rates</keyword> on items, including accommodation services for students and solar cookers, and took a host of taxpayer-friendly measures including waiver of interest and penalty for demand notices issued in the first three years of <keyword id="6354679" type="General" weightage="100" keywordseo="GST" source="Orion">GST</keyword> rollout. Briefing reporters after the 53rd <keyword id="3680839" type="General" weightage="20" keywordseo="GST-Council-meeting" source="Orion">GST Council meeting</keyword>, Finance Minister <keyword id="129243" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="Orion">Nirmala Sitharaman</keyword> said the Council has recommended to roll-out the biometric-based <keyword id="20433416" type="General" weightage="20" keywordseo="Aadhaar-authentication" source="keywords">Aadhaar authentication</keyword> of registration applicants on pan-India basis in a phased manner. This will help check fraudulent registration done to avail input tax credit and evade taxes. To reduce litigation, the Council decided to fix a monetary limit for tax officers to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively. It also recommended reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under Goods and Services Tax (GST). The maximum amount of pre-deposit for filing appeal with the appellate authority has been reduced from Rs 25 crore CGST and SGST each to Rs 20 crores CGST and SGST each. This will help ease cash flow and working capital blockage for the taxpayers. "The 53rd GST Council meeting has taken a number of decisions on trade facilitation, easing compliance burden and giving relief to taxpayers in terms of easing compliance," Sitharaman said. The Minister said the next meeting of the GST Council will be held in August in which the Group of Ministers (GoM) on GST rate rationalisation under Bihar Deputy Chief Minister Sumant Chaudhary, will give a presentation on the status of the work and aspects covered by the panel and work pending before the panel. "What was decided in the Council is, when we meet in the next GST Council meeting we will start a discussion on rate rationalisation... There will be a presentation by the GoM irrespective of whether the report is draft... and then Council will start the discussion on rate rationalisation in the next meeting in August," Sitharaman said. The GST Council on Saturday recommended to exempt Accommodation Services of up to Rs 20,000 per person per month from GST. This is subject to the condition that these services are supplied for a minimum continuous period of 90 days. "It's primarily meant for students," Sitharaman said. In a taxpayer friendly move, the Council has decided to waive interest and penalties for demand notices issued under Section 73 of the CGST Act (for cases not involving fraud, suppression or wilful misstatement) for the fiscal years 2017-18, 2018-19 and 2019-20, if the full tax demanded is paid by March 31, 2025. GST, which subsumed 17 local taxes and cesses, was rolled out on July 1, 2017. With its introduction, prices of various products and services used by masses have moderated. As per the CBIC data, mobile phones and many household items including TV, refrigerator, washing machine and AC have become cheaper post GST. It has reduced burden on household income and improved affordability. The Council also decided to refer the standing committee's recommendation to exempt GST on fertiliser and cut rates on raw materials to the GoM on rate rationalisation. Currently, GST is levied at 5 per cent on fertilisers, while its raw materials like sulphuric acid and ammonia face 18 per cent tax. Also the Tax Collected at Source (TCS) rate for e-commerce suppliers has been cut from present 1 per cent to 0.5 per cent, which will ease the financial burden on the suppliers making supplies through E-commerce platform. Besides, services provided by Indian Railways to the general public, namely, sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services as well as intra-railway transactions would be exempt from GST. GST Council has prescribed a uniform rate of 12 per cent on all milk cans meaning steel, iron, aluminum which are irrespective of the use. The Council also recommended a uniform GST rate of 12 per cent on all carton boxes and cases of both corrugated and non-corrugated paper or paper board, which in particular, help the apple growers of Himachal Pradesh and Jammu &amp; Kashmir. All types of Sprinklers, including fire water sprinklers, will attract 12 per cent GST. Solar Cookers, whether it has a single or dual energy source, too will attract a 12 per cent tax. The Council also decided that GST anti-profiteering provisions will have a sunset date of April 1, 2025. Current cases and investigations with regard to profiteering complaints will be handled by the Principal bench of GST Appellate Tribunal (GSTAT), instead of the Competition Commission of India (CCI). Also, the time limit to avail input tax credit w.r.t. any invoice or debit note through any GSTR 3B return filed up to November 30, 2021 for FY 2017-18, 2018-19, 2019-20 and 2020-21, has been fixed at November 30, 2021. Sitharaman said less than two per cent of the total 58.62 lakh taxpayers under Central GST administration has been sent tax notices and the intention of the government is to make GST assessees life easier by reducing compliance requirements. "I want to reassure the assessees that our intent is to make GST assessees life easier, we are working towards less and less compliance. On behalf of the CGST, notices are not being sent left, right and centre. Only 1.96 per cent of all active tax assessees have been sent notices from Central GST," Sitharaman said.

GST Council tweaks tax rates; Waives interest, penalty on tax dues for first 3 years of rollout

The <keyword id="6355040" type="General" weightage="80" keywordseo="gst-council" source="Orion">GST Council</keyword> is likely to introduce an 18 per cent tax rate on corporate guarantees extended by parent companies to their subsidiary firms for getting loans from banks, according to reliable sources. The issue was taken up by the <keyword id="6354679" type="General" weightage="100" keywordseo="gst" source="Orion">GST</keyword> Council's law committee during various meetings held recently. The law committee is of the view that extending a corporate guarantee is a related party transaction that is considered as a supply. The logic is that since supplies come in the 18 per cent GST bracket, this should also be applicable to corporate guarantees. The law committee has recommended adopting valuation rules in line with safe harbour rules under the <keyword id="6370810" type="General" weightage="20" keywordseo="income-tax-act" source="Orion">Income Tax Act</keyword> for providing corporate guarantees. Under these rules, in eligible international transactions, the minimum acceptable commission/fee is 1 per cent of the amount guaranteed. Therefore, it was proposed that there is a need to consider adopting the same in the case of related party transactions under GST as well. The final decision will be taken at the GST Council meeting on Saturday. A corporate guarantee is an arrangement among group companies by which a parent company agrees to act as a guarantor for a subsidiary company while securing credit facilities from a bank. These arrangements are executed either without any consideration or with a nominal commission on the loan amount. The GST Council is also expected to take up the issue on whether this 18 per cent GST should be levied on personal guarantee, as well given by promoters/directors for loans given by banks to a company. In the case of a personal guarantee, the law committee cited the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s mandate which states that no consideration by way of commission, brokerage fees, or any other form could be paid to the director by the company, directly or indirectly, in lieu of providing a personal guarantee to the bank for borrowing credit limits. This appears to suggest that the 18 per cent GST is not strictly applicable in cases of personal guarantees.

GST Council likely to levy 18% tax rate on corporate guarantees for loans

The <keyword id="19994390" type="General" weightage="100" keywordseo="GST-Council" source="keywords">GST Council</keyword> on Monday is expected to deliberate on a host of issues, including <keyword id="20118944" type="General" weightage="20" keywordseo="taxation" source="keywords">taxation</keyword> of insurance premiums, GoM's suggestions on rate rationalisation, and a status report on <keyword id="19939772" type="General" weightage="20" keywordseo="online-gaming" source="keywords">online gaming</keyword>, sources said. Sources said the fitment committee, comprising Centre and state tax officials, will present a report on GST levied on life, health and reinsurance premiums and the revenue implications. The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, will decide on whether to reduce the tax burden on <keyword id="19894985" type="General" weightage="20" keywordseo="health-insurance" source="keywords">health insurance</keyword> from the current 18% or exempt certain categories of individuals, like senior citizens. The deliberations will also happen with regard to the goods and services tax (GST) cut on <keyword id="23083492" type="General" weightage="20" keywordseo="life-insurance-premium" source="keywords">life insurance premium</keyword>. In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health <keyword id="22612491" type="General" weightage="20" keywordseo="insurance-premium" source="keywords">insurance premium</keyword>, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium. The issue of taxation on insurance premium figured in Parliament discussions with opposition members demanding that health and life insurance premiums be exempt from GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue. Finance Minister Nirmala Sitharaman in her reply to discussion on the Finance Bill had said 75% of the GST collected goes to states and opposition members should ask their state finance ministers to bring the proposal at the GST Council. West Bengal Finance Minister Chandrima Bhattacharya had raised the issue in the meeting of the Group of Ministers (GoM) on rate rationalisation last month and the matter was referred to the fitment committee for further data analysis. The GoM had opined against any tinkering of four-tier GST slab of 5, 12, 18, and 28 % for the time being. The panel, however, had asked the fitment committee to look into any scope for rationalisation of rates of goods and services. With regard to online gaming, Centre and state tax officers will present a "status report" before the GST Council. The report would include <keyword id="20053837" type="General" weightage="20" keywordseo="GST-revenue" source="keywords">GST revenue</keyword> collection from the online gaming sector before and after October 1, 2023. From October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28% GST. Prior to that, many online gaming companies were not paying 28% GST, arguing that there were differential tax rates for games of skill and games of chance. The GST Council in its meeting in August 2023 had clarified that online gaming platforms were required to pay 28% tax and subsequently, Central GST law was amended to make the taxation provision clear. Offshore gaming platforms were also mandated to register with GST authorities and pay taxes, failing which the government would block those sites. The council had then decided that the taxation on online gaming sector would be reviewed after six months of its implementation. Sources said the Council would deliberate on the status of taxation on the sector, and any change in tax rates is unlikely. Besides, the Council is likely to be apprised about the ongoing drive against fake registration, the success of the drive and action taken against such entities. The total amount of suspected GST evasion would also be presented before the Council. The drive, from August 16, 2024, to October 15, 2024, is aimed at detecting suspicious/fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers. In the first drive between May 16, 2023 to July 15, 2023, against fake registration, 21,791 entities (11,392 pertaining to state tax jurisdiction and 10,399 pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent. An amount of Rs 24,010 crore (state - Rs 8,805 crore + centre - Rs 15,205 crore) of suspected tax evasion was detected during the special drive. Also, the Council would approve notifications, including that of the amnesty scheme, announced in the last council meeting. The council in June meeting took a host of taxpayer-friendly measures, including waiver of interest and penalty for demand notices issued in the first three years of GST -- 2017-18, 2018-19 and 2019-20 -- if the full tax demanded is paid by March 31, 2025. To reduce litigation, a monetary limit for tax officers, to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court was fixed at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively, by the Council. It also recommended a reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under goods and services tax (GST).

GST Council to deliberate on taxation of insurance premium, report on online gaming tomorrow

<ul><li>Decriminalisation of offences under the GST law, setting up appellate tribunals and mechanism to curb tax evasion in pan masala, gutkha businesses among the issues to be discussed.</li><li>Besides, GST on online gaming and casinos may come up for deliberations at the Council meeting.</li><li>With regard to taxation of online gaming, casinos and horse racing, the GoM, in its last meeting in November, had agreed on a 28 per cent GST on these segments.</li></ul> Decriminalisation of offences under the GST law, setting up appellate tribunals and mechanism to curb tax evasion in pan masala and gutkha businesses are among the issues slated to be discussed in the <keyword id="3680839" type="General" weightage="20" keywordseo="gst-council-meeting" source="Orion">GST Council meeting</keyword> which began on Saturday morning. Besides, GST on online gaming and casinos may come up for deliberations at the Council meeting. The Group of Ministers (GoM), chaired by Meghalaya Chief Minister Conrad Sangma, set up last year on the issue had submitted its report to Finance Minister Nirmala Sitharaman on Thursday. The Council would also consider a report of tax officers and give clarity on the rate applicability in certain goods and services. "Union Finance Minister Smt. @nsitharaman chairs the 48th meeting of the GST Council via virtual mode, in New Delhi, today," the finance ministry tweeted. With regard to decriminalisation of offences, the law committee of the GST Council, comprising tax officers from the Centre and states, has suggested to the Council to increase the monetary threshold for launching prosecution for GST offences. The law committee has also suggested that the fee payable by taxpayer for compounding of GST offences be lowered to 25 per cent of the tax amount, from up to 150 per cent currently, with a view to improving ease of doing business. It has suggested raising the threshold of launching prosecution to Rs 20 crore, from Rs 5 crore at present. Launching of prosecution by taxmen means commencement of legal proceedings against the offender. The report of the GoM on tax evasion by pan masala and gutkha companies is likely to be taken up for discussion in the Council, sources said. With regard to setting up of Goods and Services Tax Appellate Tribunals (GSTATs), the GoM has suggested that the tribunals should consist of two judicial members, and one technical member each from the Centre and states, besides a retired Supreme Court judge as President, sources said. The GoM on GSTATs was set up in July under the chairmanship of Haryana Deputy Chief Minister Dushyant Chautala. With regard to taxation of online gaming, casinos and horse racing, the GoM, in its last meeting in November, had agreed on a 28 per cent GST on these segments. However, in absence of consensus on whether the tax should be levied on only the fees charged by the portal or the entire consideration, including the bet amount, received from participants, the GoM had decided to refer all suggestions to the GST Council for a final decision. Currently, online gaming attracts 18 per cent GST. The tax is levied on gross gaming revenue, which is the fees charged by online gaming portals. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/how-indians-have-spent-their-money-on-swiggy-in-2022/slidelist/96285686.cms">Spending ₹75,000 on an order to buying groceries worth ₹16.6 lakh, here’s how Indians used Swiggy in 2022</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/upcoming-electric-scooters-in-india-in-2023/articleshow/96278794.cms">From Suzuki and TVS to Hero Electric: Here are some of the top electric scooters expected to launch in 2023</a>

GST Council meet: decriminalisation, tax evasion in pan masala, gutkha biz on agenda

<keyword id="6355040" type="ORGANIZATION" weightage="100" keywordseo="GST-Council">GST Council</keyword> at its meeting on Friday will finalise the rules regarding registration, refunds and payment and also take a view on exemption of goods under the upcoming Goods and <keyword id="645517" type="COMPANY" weightage="20" keywordseo="services-tax">Services Tax</keyword> (GST) regime. 
 To be chaired by Union <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>, the Council will also deliberate on a formula for payment of compensation to states for revenue loss in the aftermath of implementation of the GST. 
 
“Tomorrow’s meeting is likely to finalise on the rules on GST. Also, a presentation will be made by the officials on compensation,” an official said. 
 
While 2015-16 will be the base year for calculating revenue compensation to states for any loss of receipts arising from rollout of GST, the final methodology will be worked out in next meetings, the official added. 
 
At the last meeting of the council, four alternatives came up for discussion for compensating states for loss of revenue after implementation of the GST. 
 
A state can be compensated if the revenue under GST falls short of the average tax earnings in best three years out of past five years. 
 
Secondly, of the five years, two outliers are left out and average is taken. If the revenue under GST is short of this, then states are compensated. 
 
Thirdly, a base year can be fixed and a particular growth rate decided for all states. If the revenue falls short of that, then the state gets compensated. 
Another suggestion was to base compensation on a fixed rate of revenue growth. 
 
The CBEC had already floated the draft rules for registration, refund, returns and invoice for the GST regime and sought stakeholder comments on the same. 
 
The Central government plans to roll out GST from April 1, 2017, and has lined up meetings of the GST Council to build consensus among the states.

GST Council to meet tomorrow to discuss rules, exemptions

Pre-packed and <keyword id="14314091" type="General" weightage="20" keywordseo="labelled-food-items" source="Orion">labelled food items</keyword> like meat, fish, curd, paneer and honey will now attract GST, a tax that will also be levied on the fee that banks charge for the issue of cheques. This after the <keyword id="6355040" type="General" weightage="50" keywordseo="gst-council" source="Orion">GST Council</keyword> - the highest decision-making body on the levy of goods and services tax - accepted most of the recommendations of a group of ministers from states on withdrawing exemptions with a view to rationalising the levy, officials said. The panel headed by <keyword id="161813" type="General" weightage="20" keywordseo="Union-Finance-Minister" source="Orion">Union Finance Minister</keyword> <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> and comprising representatives of all states and UTs, on the first day of the two-day meeting accepted the GoM's recommendation for reviewing the exemption from GST that packed and labelled food items currently get. So pre-packed and labelled meat (except frozen), fish, curd, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice (muri), all goods and organic manure and coir pith compost will not be exempted from GST and will now attract a 5 per cent tax. Similarly, an 18 per cent GST will be levied on fee charged by banks for the issue of cheques (loose or in book form). Maps and charts including atlases will attract a 12 per cent levy. Goods that are unpacked, unlabelled and unbranded will continue to remain exempt from GST. Besides, a 12 per cent tax on hotel rooms below Rs 1,000/day will be levied, as against a tax exemption currently. GST rate rationalisation is important to boost the weighted average GST rate that has fallen to 11.6 per cent, against 14.4 per cent at the time of launch. The GST Council also recommended a correction in the inverted duty structure for a host of items, including edible oil, coal, LED lamps, printing/drawing ink, finished leather and solar water heater. The Council is likely to discuss on Wednesday the demand for an extension of compensation paid to states for revenue lost from their taxes such as sales tax (VAT) being subsumed into a national GST, besides a 28 per cent tax on casinos, online gaming and horse racing. Non-BJP ruled states such as Chhattisgarh want the compensation regime to be extended or the share of states in the GST revenues be increased to 70-80 per cent from the current 50 per cent. And to drive their point, they cited a recent <keyword id="6354977" type="General" weightage="50" keywordseo="supreme-court" source="Orion">Supreme Court</keyword> ruling that decisions made by the Council are not binding on states and any decision not taken unanimously could potentially lead to unraveling of the landmark economic reform. The report of the state finance ministers on GST systems reforms, which recommended biometric authentication of high risk taxpayers and real-time validation of bank accounts too was cleared by the Council. As per data on revenue growth collated for the Council meeting, only five out of 31 states/UTs, Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim, registered a revenue growth higher than the protected revenue rate for states under GST in financial year 2021-22. With regard to e-way bill on intra-state movement of gold, gold jewellery and precious stones to check evasion, the Council recommended that states can decide on the threshold above which the electronic bill is to be made mandatory. A panel of state ministers had recommended the threshold to be Rs 2 lakh and above.

Pre-packed meats, curds, paneer and puffed rice will now attract GST

9 important changes and key takeaways from the 53rd GST Council meeting

The <keyword id="6355040" type="UNKNOWN" weightage="20" keywordseo="GST-Council">GST Council</keyword> will meet here on Thursday to take up the single-point agenda of <keyword id="9025375" type="UNKNOWN" weightage="20" keywordseo="GST-compensation-to-states">GST compensation to states</keyword> affected by delays in the release by the Centre, a government official privy to meeting agenda said. The meeting was earlier proposed in July, as announced by Union Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> after the first GST Council meeting in the backdrop of Covid-19 pandemic in June. "The Council will meet tomorrow with a single-point agenda to discuss the compensation cess. Any changes in the GST rates or cess structure would also relate to how timely compensation to the states could be released," the official said. Faced with sharp decline in GST collections due to the nationwide lockdown and disruptions in economic activities across the country, one of the options before the Centre is to pay <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> to states by using a portion of its borrowings. The compensation has not been paid to the states since March. Even the compensation for March was delayed and paid in late July. A legal opinion on the matter sought by the Centre from the Attorney General earlier suggested that the former is under "no obligation to pay GST compensation shortfalls to the states" and it is the GST Council which has to decide on making good the shortfall in the goods and services tax compensation fund by putting sufficient amount into it. The AG had opined that the GST Council can recommend to the Centre to allow the states to borrow on the strength of the future receipts from the compensation fund, sources said. It would, however, be for the central government to take a final decision in the matter under Article 293(3) of the Constitution. "If there is need for borrowings to meet compensation to the states and who is going to borrow? How we are going to pay for it?" the Finance Minister had said about the Council meeting in June, hinting that the fall in revenues has become a huge cause of concern for the Centre to meet its liability towards the states as per the GST legislation. Under the GST law, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the Goods and Services Tax (GST) in July 2017. The compensation is the difference between actually revenue collected and projected revenue. The projected revenue is revenue growth of 14 per cent for the states per year over the base year 2015-16. As per the GST Act, full compensation to the states has to be paid for a period of five years till FY22 only through the compensation fund that gets its money through the levy of GST compensation cess on a few items. However, with the fund not getting enough collections since August 2019, the GST compensation to the states has been delayed. The Centre is now looking at getting GST Council nod for a mechanism to finance the compensation. The situation vis-a-vis the GST revenue has worsened in April 2020, with several states indicating a shortfall in collections to the tune of 80-90 per cent of the average monthly collections during this time of the year. In fact, Delhi has said its GST collections may end up at a mere Rs 300 crore in April as against a collection of Rs 3,500 crore in the same month previous year. Other states like Tamil Nadu, Assam, West Bengal, and Andhra Pradesh are also facing severe revenue decline due to shrinking economic activities during the Covid-induced lockdown. The problem has continued into May as well. With economic activity and GDP growth projected to remain subdued for most part of FY21, the Centre is looking at all possible means on how it could meet its constitutional obligation of compensating the states for their revenue losses. After February, when the Centre released GST compensation of Rs 19,950 crore for October and November 2019, the Centre has cleared dues for December, January and February only now. In late July, the Centre released Rs 13,806 crore to the states as compensation for their revenue losses in the GST goods regime for March 2020. "The total amount of compensation released for the year 2019-20 is Rs 1,65,302 crore whereas the amount of cess collected during the year 2019-20 was Rs 95,444 crore," a government statement had said. The monthly compensation requirement for the states in 2020-21 is pegged at Rs 20,250 crore, government sources said, which leaves a big gap between what needs to be paid and what is getting collected. Even in FY21, monthly cess collections could be at a low Rs 7,000-8,000 crore, or even lower. According to previous releases of the Finance Ministry, in the FY 2017-18, a total GST compensation cess of Rs 62,611 crore was collected, of which Rs 41,146 crore was released to the states/UTs as GST compensation. In the FY 2018-19, Rs 95,081 crore was collected as GST compensation cess, of which Rs 69,275 crore was released to the states and UTs as GST compensation. As on March 31, 2019, Rs 47,271 crore collected as GST compensation cess remained unutilised after the release of GST compensation to the states and UTs in the FYs 2017-18 and 2018-19. Since the end of August 2019, the central government has started realising the impending precarious position in paying the GST compensation to the states and UTs as the compensation cess requirement was twice of the average monthly cess collection. The sources said that though the GST Council also has the option to either bring in more items under the cess base by expanding the base of GST cess items, or to increase cess rate on the existing items. Any increase in compensation cess on a few items could yield only about Rs 2,000-3,000 crore a year. Therefore, the Council in its earlier meeting also discussed other options like forego full cess compensation, which was increasing @14% per annum, or to go ahead with whatever compensation is available. One more option looked at was to raise the tax rate on items through rationalisation via shuffling of slab rates. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/if-you-have-a-bank-loan-that-you-are-unable-to-pay-restructuring-is-on-its-way/articleshow/77391894.cms">If you have a bank loan that you are unable to pay, restructuring is on its way</a> <a href="https://www.businessinsider.in/finance/banks/news/loan-moratorium-still-ends-on-aug-31-while-supreme-court-gives-the-government-another-week-to-clarify-if-accrued-interest-should-be-waived/articleshow/77758597.cms">Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived</a>

GST Council meet on Thursday to figure out how states will be compensated for delays in payment

The <keyword id="6355040" type="General" weightage="20" keywordseo="GST-Council" source="Orion">GST Council</keyword> approved the amendments in the GST Act and GST Rules for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through <keyword id="35621" type="General" weightage="20" keywordseo="E-COMMERCE" source="Orion">E-Commerce</keyword> Operators (ECOs), subject to certain conditions. Appreciating wholeheartedly the major decision of the GST Council to allow small <keyword id="8112933" type="General" weightage="20" keywordseo="unregistered-vendors" source="Orion">unregistered vendors</keyword> to sell their goods through e-commerce portals, the <keyword id="76562" type="General" weightage="20" keywordseo="Confederation-of-All-India-Traders" source="Orion">Confederation of All India Traders</keyword> (CAIT) on Saturday thanked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for this "progressive decision" which was demanded by CAIT since last more than two years. CAIT national president B.C. Bhartia and Secretary General Praveen Khandelwal said this decision will empower small traders who are below GST threshold limit to expand their business through e-commerce and will strongly strengthen Digital India vision. There are more than 8 crore small traders in the country but a large number of traders are conducting business activities without GST registration since their annual sale is below the GST threshold limit. Such traders will now be able to trade on e-commerce. Earlier, GST Council in its 47th meeting had granted in-principle approval for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through ECOs, subject to certain conditions. CAIT said that India is fast emerging as the e-commerce hub and there is tremendous growth in online business. E-commerce business in India is now approximately 10 per cent of total retail. "In view of this it was extremely pertinent that small vendors, those who have small turnovers and do not fall under the purview of the GST, were not able to conduct online business, thus causing huge loss of market and business opportunities," a statement said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/gst-council-meet-decriminalisation-tax-evasion-in-pan-masala-gutkha-biz-on-agenda/articleshow/96297108.cms" style="">GST Council meet: decriminalisation, tax evasion in pan masala, gutkha biz on agenda</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/tata-motors-subsidiary-to-operate-921-electric-buses-in-bluru/articleshow/96294242.cms" style="">Tata Motors subsidiary to operate 921 electric buses in B'luru</a>

GST Council to allow e-commerce for unregistered vendors

Union Finance Minister <keyword id="129243" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> on Saturday morning chaired a <keyword id="20255269" type="General" weightage="20" keywordseo="pre-budget-meeting" source="keywords">pre-budget meeting</keyword> with Finance Ministers of all States and Union Territories. The Pre-Budget Meeting is organised by the Ministry of Finance and Corporate Affairs with Finance Ministers of all the States and Union Territories (with Legislature) to take suggestions for the upcoming <keyword id="20387181" type="General" weightage="20" keywordseo="Union-Budget-2024-25" source="keywords">Union Budget 2024-25</keyword>. Ministers of State along with other stakeholders are participating in the meeting and visuals showed Uttar Pradesh finance minister Suresh Kumar Khanna, and finance minister of Rajasthan Diya Kumari at the Bharat Mandapam venue before the meeting commenced this morning. The Union Finance Ministry had begun consultations on the budget a few days ago with different stakeholders of economy. Sitharaman has met economists, finance and capital market experts and industry bodies. Sitharaman chaired the first pre-budget consultations with leading economists on June 19. The meeting was attended by Union minister of State for Finance Pankaj Chaudhary, the finance secretary, secretaries of the departments of economic affairs, revenue, financial services and corporate affairs and the chief economic adviser. Meanwhile, Sitharaman will also chair the 53rd <keyword id="19922145" type="General" weightage="20" keywordseo="Goods-and-Services-Tax" source="keywords">Goods and Services Tax</keyword> (GST) Council Meeting scheduled in the second half of the day. This is the first meeting of the <keyword id="19994390" type="General" weightage="100" keywordseo="GST-Council" source="keywords" meta.keywordsubtype="org" meta.entityname="GST Council" meta.hostid="261" meta.entityid="GST Council">GST council</keyword> after the formation of the new government. State finance ministers will also be present at the 53rd meeting of the Goods and Services Tax Council. As is the norm, the GST Council gets together to discuss issues pertaining to the GST regime, such as tax rates, modifications to policies, and administrative challenges. The Council is a key player in shaping India's indirect tax system, making sure that it facilitates company and citizen tax relief while also being in line with the country's economic objectives. The information on the agenda of Council meeting is not yet in public domain. However, the decisions and recommendations arising from the 53rd GST Council meeting will be closely watched by various stakeholders, including businesses, policymakers, and the general public, as they have the potential to influence taxation, trade, and overall dynamics. Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for five years. Meanwhile, preparation has commenced for the Union budget 2024-25, the first for the third term of the Prime Minister Narendra Modi-led <keyword id="22141478" type="General" weightage="20" keywordseo="National-Democratic-Alliance-government" source="keywords" meta.keywordsubtype="org" meta.entityname="National Democratic Alliance government" meta.hostid="261" meta.entityid="National Democratic Alliance government">National Democratic Alliance government</keyword>.

Union Finance Minister Sitharaman chairs pre-budget meeting with finance ministers of states, UTs; GST Council to meet later today

In what is one of the biggest reductions since <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> came into effect from July 1, the <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> has today reduced <keyword id="6403501" type="PERSON" weightage="20" keywordseo="tax-rates">tax rates</keyword> on more than 175 items. The council, which is currently meeting in Guwahati, has decided to cut keep only 50 luxury and 'sin’ goods like tobacco in the highest slab. Meanwhile, tax rates have been slashed from the existing 28% on a host of consumer items such as chocolates, chewing gum, shampoo, deodorant, shoe polish, detergents, nutrition drinks, marble and cosmetics. "Only 50 items will face 28% rate," Bihar finance minister Sushil Modi told reporters on the sidelines of the ongoing Council meet. "There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned to more items. Now all types of chewing gum, chocolates, preparation for women cosmetics, shaving and after-shave items, deodorants, washing powder detergent and granite and marble. All these items have been put in the 18% category," Modi said. Paints, cement have been retained at 28%. Luxury goods such as washing machine and air conditioners will still be taxed at 28%. The tax cuts will have a revenue implication of about Rs 20,000 crore. Even as there is a consensus that slowly, the 28 per cent slab should be brought to 18 per cent, the council is still skeptical because of a huge revenue implication. In the next few hours, the Council is expected to take crucial decisions to make composition scheme more attractive, improve compliance burden, and it may explore the possibility of including real estate under GST.

Only 50 luxury and 'sin' items find their place in GST's highest slab

New Delhi, Dec 18 () In an unprecedented move, GST Council - the highest decision making body of the new indirect tax regime - on Wednesday witnessed first-ever voting on the issue of levying tax on lotteries as states expressed divergent opinions. 
Decisions in the previous 37 meetings of the GST Council, headed by Union Finance Minister and comprising of representatives of all states and UTs, had been taken unanimously. These included fixing of tax rates on dozens of goods and services but never had voting done to decide on the issue.
However, when the issue of levy of GST on lottery came up at the 38th meeting of the Council, consensus eluded, sources said. This led to a vote being taken to decide on the issue by a majority.
Sources said a uniform rate of 28 per cent GST rate will now be applicable on lotteries from March 1.
Currently, dual GST rates are imposed on lotteries.
As many as 21 states voted in favour of 28 per cent GST rates as opposed to 7 against it, they said.
The lottery industry has been pressing for a uniform GST rate of 12 per cent and removal of tax on the prize money, saying the existing dual rate is hampering the growth of the business.
Currently, a GST of 12 per cent is levied on state lotteries sold within a state and 28 per cent on those sold outside that state.
To sort out differences in the views among states, the GST Council had earlier constituted an eight-member group of ministers under the chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar.
The Council in its July meeting had also decided to seek a legal opinion from the Attorney General on the issue.
In a representation made to Finance Minister Nirmala Sitharaman, All India Federation of Lottery Trade &amp; Allied Industries suggested that the GST Council could consider imposing GST on lotteries after abating the prize money component of the lottery ticket since the said amount never forms part of the income in the lottery trade. DP ANZ
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