A formal meeting room with council members discussing GST issues around a large conference table. The room has documents, laptops, and a projector screen displaying charts and graphs. The backdrop displays 'GST Council Meeting'.

Crucial GST Council Meeting Set to Tackle Key Issues and Boost Compliance: Nirmala Sitharaman to Chair 53rd GST Council Meeting: Key Agenda Items and Industry Expectations

A day after taking charge as Union Finance Minister, Nirmala Sitharaman is all set to chair the much-awaited 53rd GST Council meeting, scheduled for June 22 in New Delhi. Ahead of the meeting, the council-nominated Fitment Committee is likely to convene to deliberate on several critical issues before sending its recommendations to the council.

53rd GST Council Meeting: Fitment Committee’s Key Considerations

ATF and Natural Gas under GST: The Fitment Committee is expected to study the proposal from the Petroleum Ministry to bring Aviation Turbine Fuel (ATF) under GST at 5% and natural gas at either 12% or 18%.

Input Tax Credit (ITC) Clarity: The committee may propose approval of clarifications on claiming ITC in several sectors where the industry has faced issues.

Tax on Metal and Steel Scrap: A proposal on tax applicability on metal and steel scrap is also likely to be considered, addressing an issue that the industry has awaited for over a year.

Inverted Duty Correction: The committee could consider a proposal to correct the inverted duty on 14 items, including textiles, leather, pharmaceuticals, and engineering goods. This proposal, sent by DPIIT, has been pending deliberation.

53rd GST Council Meeting: GST Council’s Agenda

Rate Rationalisation: The council might revise the existing Group of Ministers on Rate Rationalisation, headed by UP Finance Minister Suresh Khanna, and set a new timeline for a detailed report on rate rationalisation and correction of the inverted duty structure.

Online Gaming GST: The industry may push for a review of GST on online gaming, but the council is likely to maintain the current policy of 28% GST on actionable claims.

Telecom Services and Spectrum Charges: Clarifying norms on claiming and applicability of ITC on telecom services and spectrum charges could also be on the agenda.

Ease of Doing Business: Measures to further ease doing business and enhance compliance under GST are expected to be proposed, including a timeline for the pan-India rollout of mandatory biometric Aadhaar-based authentication of GST taxpayers.

Foreign Airlines and Shipping Lines: The council might consider exempting services rendered between the head offices and local branches of foreign airline operators from GST.

ISD Regulations: Businesses are looking forward to new regulations on ISD and its implementation date.

53rd GST Council Meeting: Industry and Experts’ Expectations

MS Mani, Deloitte India: “The next GST Council meeting needs to take up the keenly awaited rate rationalization discussion. Including low-impact petroleum products like natural gas within the GST ambit would be highly beneficial to business.”

Mahesh Jaising, Deloitte India: “With GST collections stabilizing and flexibility to make changes outside the Union Budget, the council has an ideal opportunity to address industry concerns effectively. Clarifications on critical matters and the rise in disputes following audits for initial years warrant a review of pre-deposit percentages and possibly an amnesty scheme to avoid long-drawn litigation.”

Abhishek Jain, KPMG: “This meeting is expected to address numerous issues, including taxability for the online gaming sector, ESOPs, corporate guarantees, and various rate-related clarifications due to recent litigations.”

Rajat Bose, Shardul Amarchand Mangaldas & Co.: “The upcoming GST Council meeting has a full agenda. Key industry issues like the taxation of online gaming and the promised review of the valuation rules introduced in October 2023 need to be addressed.”

The 53rd GST Council meeting promises to be a pivotal event, with significant implications for various industries and the overall GST framework in India. Industry stakeholders are eagerly awaiting the outcomes, hoping for resolutions that will facilitate smoother operations and compliance under the GST regime.

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