The 53rd meeting of the Goods and Services Tax (GST) Council is scheduled to take place on June 22, 2024, under the chairmanship of Union Finance Minister Nirmala Sitharaman. This meeting comes after a gap of eight months and is significant as it is the first council meeting following the NDA government’s third-term win in the Lok Sabha elections. The GST Council is expected to deliberate on several key indirect tax priorities, including taxation on online gaming, an amendment to overrule retrospective tax demands, relief for reinsurers, GST relief on fertiliser companies, and tax relief for foreign airlines. Here are the five main expectations from today’s GST Council meeting:
1. GST on Online Gaming
The GST Council is likely to review the contentious 28% tax on online gaming, which was imposed in the 52nd GST Council meeting. There have been discussions regarding this decision’s possible effects on the rapidly growing online gaming market as well as worries about separating games of skill from games of chance. The council may discuss proposals to bring clarity and relief to businesses facing past tax demands, ensuring a more predictable and stable tax environment.
2. Amendment to Overrule Retrospective GST Demands
The amendment to negate retroactive GST demands will be discussed by the council. In order to ensure a more stable and predictable tax climate, this proposed amendment aims to give assistance to enterprises that have previously faced tax demands.The amendment is expected to address the concerns of businesses that have been facing retrospective tax demands, which have been a major source of uncertainty and stress for them.
3. Relief for Reinsurers
It is anticipated that the council would talk about how to tax reinsurance services in order to relieve the burden on reinsurers. Reinsurance is the practice of an insurance company paying a premium to another insurance company, known as a reinsurer, to transfer a portion of its risk. In essence, it’s insurance for insurers. The relief is expected to help the reinsurance industry, which has been facing difficulties due to the current tax structure.
4. GST Relief on Fertiliser Companies
The Standing Committee on Chemicals and Fertilizers’ February suggestions to lower the GST on nutrients and raw materials in the best interests of farmers and fertilizer manufacturing enterprises may be discussed by the council. Fertilizers are currently subject to a 5 percent GST rate, whereas raw materials such as ammonia and sulfuric acid are subject to an 18 percent GST rate. The relief is expected to help fertiliser companies and farmers by reducing the cost of production and increasing their competitiveness.
5. Tax Relief for Foreign Airlines
There will also be tax breaks for foreign airlines operating in India when they import maintenance, repair, and operations (MRO) services. Right now, the tax rate is eighteen percent. The relief is expected to help foreign airlines by reducing their operational costs and making India a more attractive destination for international air travel.
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Conclusion
The GST Council meeting on June 22, 2024, is significant as it addresses several key indirect tax priorities. The council is expected to review the 28% tax on online gaming, amend the GST Act to overrule retrospective tax demands, provide relief for reinsurers, offer GST relief on fertiliser companies, and grant tax relief for foreign airlines. These measures are expected to bring clarity and relief to businesses, ensuring a more predictable and stable tax environment. The meeting is also significant as it comes ahead of the July 2024 budget, and the decisions taken today may influence the indirect tax policies outlined in the budget
