Highlights of the GST Council Meeting

GST Council Meeting

The 47th meeting of the GST Council was held recently on the 28th and 29th of June, 2022. In July, the GST Council will celebrate its fifth anniversary. The Goods and Services Tax Law was first implemented on the 1st of July. The council had a discussion on various topics such as GST rates rationalization, fixation of GST rates on online gaming, and on IT reforms. Key takeaways from the GST council meeting include removing exemptions for the levying of GST on several food grains and milk products and providing measures and incentives for trade facilitation.

Major Highlights of GST Council Meeting

• The GST Council in the recent meeting discussed various topics and gave its recommendations and finalized decisions. These decisions and points are summarised below:-
• The GST Council discussed and talked about GST rate rationalization by increasing tariffs on several goods for the correction of the inverted duty structure. It is done to avoid the concentration and accumulation of input tax credit that results in the blockage of working capital.
• GST rates have also been increased by removing exemptions on several food items especially milk products and also levied the GST on hotel accommodation up to 1000 rs and hospital accommodation excluding ICU that can go up to Rs 5,000 per day. However, it’s not the appropriate time to increase GST rates because of high inflation.
• Recommendation and proposal for levying 28 per cent of GST on online gaming, cryptocurrencies and casinos have been deferred for time being. The government has put a halt to this recommendation because it can adversely affect the industry. However, there’s a need to differentiate between skill-based games and other games.
• Levying 5 per cent of GST on electric vehicles whether or not fitted with a battery pack would benefit the auto industry according to the GST council’s decision.
• Further decisions include waiving the requirement of mandatory registration for GST for the supply of goods through e-commerce platforms by a person having turnover below the specified threshold frequency or limit.
• Now SME and MSME sectors and composite taxpayers can also operate their business via e-commerce platforms such as Amazon. However, this scheme will be implemented from the 1st of January, 2023.
• The limitation period is to be excluded from the 1st of march 2020 to 28 February 2022 for filing refund applications or issuance of demand/order in respect of erroneous refunds. It will help in reducing pending litigation because of rejection of refunds being time-barred and other reasons.
• The council has also asked to resolve further issues related to trade such as the interpretation of provisions relating to restrictions on availing of ITC.
• Other pre-requisites and requirements pertaining to the contractual relationship between an employer and employee.
• Regarding setting up or construction of a tribunal for resolving GST-related issues and cases, for this matter, the GST council has recommended setting up a ministerial panel to make recommendations for appropriate amendments to the CGST. This tribunal will help in reducing the burden of pending litigation cases on various courts in this country.

Conclusion

Various milestones have been achieved by making various changes and rectifications in GST law in these five years since the introduction of GST law in the year 2017 such as the increased role of advanced technology, and the setting up of GSTN portals for easing the interaction between the authorities and taxpayers, etc. However, still, there’s a need for many changes and rectifications in the GST law as it is not perfect yet.