NEW DELHI: The Goods and Services Tax (GST) Council, which is scheduled to meet on December 17, is likely to discuss a host of issues that have arisen following the recommendations of the GST fitment panel.
The Council could discuss the decriminalisation of offences, the setting up of an appellate tribunal and the fitment panel’s pending recommendations, a top source said.
“The Council may also discuss certain tax rate changes for various sectors like textile, insurance among others, but a rate cut in the tax on gold, silver, and diamonds is not likely to be part of the discussion. The most anticipated topic of the inclusion of petrol and diesel prices in the GST platform and taxing on crypto currency as well as gaming will be discussed as well. But any conclusive decisions on these key issues are unlikely,” the source added.
This would be the last meeting of the GST Council ahead of the Union Budget 2023. The issue of digital assets, which is a part of crypto currency business, is expected to be one of major topics that are on the agenda as the government expects to have a final decision before it announces its new Budget 2023-24.
The digital assets have been brought under the taxation umbrella with a 28 per cent GST levy starting as early as May this year. But the source said that the decision on digital assets would take some more time, as the group of ministers has not submitted its final report to the panel.
“It is a complex issue. Many states are undecided about the issue as it operates at various levels. State governments are examining pros and cons of the issue. So, it is unlikely that the GST panel would take a final decision on this issue in the meeting,” it said.
In the Union Budget 2022-2023, Sitharaman had announced the impositionof a 30 per cent tax on income from crypto currency. As per a report by law firm Lakshmikumaran & Sridharan, in India, the online gaming industry currently pays GST at the rate of 18 per cent on Gross Gaming Revenue (GGR) amounting to over Rs 2,200 crore per year.
The GST Council has set up a panel of ministers to suggest changes in the current GST rate and valuation method for the online gaming sector. The Group of Ministers (GoM) is understood to have finalised its report and is likely to recommend a GST levy of 28 per cent on online gaming, irrespective of whether it is a game of skill or chance.
It is expected that there may be changes in various sectors like textile and insurance sector. For insurance, the Council may give a breather on no-claim bonus under insurance policies. “The finance minister is expected to clarify that the GST cannot be levied on no-claim bonus as the common citizen in the country suffers a lot due to tax imposed on it,” it said.
For the textile sector, the Council may give a big relief to textile firms as the government is making its all-out effort to promote the sector.
“As higher tax is a major huddle for the sector, it wants a ‘sizable’ tax cut in the meeting. Apart from the tax breather, the Centre has finalised a production-linked incentive (PLI) scheme for garments, made-ups and home textiles early next year with an aim to promote small and medium units. After the first edition a PLI scheme for man-made fiber garments and technical textiles, now the second edition of the scheme is likely for the sector,” it said.
