The Goods and Service Tax (GST) Council of India held its 50th meeting on 11th July 2023. It was led by Union Finance Minister Nirmala Sitharaman at Vigyan Bhawan, New Delhi. The GST Council is an apex committee that modifies, streamlines, or recommends amendments to the Union and the States regarding GST, including model GST laws, the types of goods and services that may be subject to or excluded from GST, etc.
This meeting focused on rate decisions, clarifications, and suggestions associated with GST levied on goods and services. The following recommendations were put forward at the 50th Meeting of the GST Council, among other things, addressing modifications to GST tax rates, trade facilitation policies, and initiatives to simplify GST compliances:
The GST rate was slashed from 15% to 8% for Fish Soluble Paste, Imitation Zari Threads or Yarn, LB Slag and Uncooked Food Items.
Further, the meeting also decided to exempt IGST on the import of cancer drug Dinutuximab, and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases. This new change may serve as a relief measure since Indian citizens previously had to bear a heavy tax of 12% IGST on such medications.
Additionally, it was determined to clarify that agriculturalists who give raw cotton to cooperatives, including kala cotton, are subject to taxation under the reverse charge method and to resolve any outstanding concerns on an “as is basis” for the past period.
The GST Council further agreed that Multi Utility Vehicles (MUVs), excluding SUVs and Sedans, would be assessed a 22% cess rate. SUVs and sedans continue to be subject to the same GST rate as before. The council also agreed to tighten the registration requirements and define utility vehicles as having a 170 mm unladen ground clearance, a 1500 CC engine, and a 4-meter length.
The council announced that the GST on restaurants inside Cineplex will attract 5% GST against 18% earlier. Prior to the change, movie tickets priced below Rs 100 were subject to a 12% tax while those priced beyond the cap were subject to an 18% GST. The entire supply (tickets + eatables) should be treated as a composite supply and taxed as per the applicable rate of the principal supply, which in this case is a cinema ticket. As a result, the GST rate applied to food and beverages supplied in Indian movie theatres will be 5%, the same as it is for restaurants and other food service establishments.
The Union Finance Minister, Nirmala Sitharaman further explained the need for a few technical changes in chewing tobacco. This involved bringing the pre-RSP mandate for the compensating cess on chewing tobacco products in accordance with the new GST mandate.
The services of private companies like ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) for satellite launches will be excluded from all GST taxes, which will be a relief to the private players in this market.
The long-overdue topic of the 28% GST levy on online gaming platforms was finally brought up during the 50th GST Council Meeting. Online gambling, horse racing, and casinos in India are now subject to a 28% GST rate on the full face value of the chips that are bought at the counter and the bets that are placed. In the instance of online gaming, the council resolved to do away with the distinction between games of skill and games of chance. The decision was left up to the GST Council because the group of ministers (GOM) was unable to agree on a course of action, and as a result, the GST Council subsequently approved the bill.
It was decided to include RBL Bank and ICBC Bank for IGST exemption on gold, silver, or platinum imports.
A detailed strategy was developed during the meeting to establish the GST Appellate Tribunal, with its main branch located in Delhi.
Exemption from the filing of annual returns (Form GSTR 9 /9A) for taxpayers having aggregate annual turnover up to Rs. 2 crores shall continue for FY 2022-23.
The GST Council’s recommendations won’t take effect until they’ve been officially announced and/or cleared up by CBIC circulars.