The GST Council will probably reflect on various critical issues, including a tax on online gaming, a revision to revoke retrospective tariff demands, and reviewing a possible exemption for reinsurance.
Union Finance Minister Nirmala Sitharaman is chairing the 53rd meeting of the GST (Goods & Services Tax) Council, her first since the Modi 3.0 government took office. The council, which includes finance ministers from all states and Union Territories, is expected to deliberate on several significant issues.
28% GST on Online Gaming
One of the most contentious topics is the 28% tax on online gaming. Despite industry debates and concerns about the distinction between games of skill and games of chance, the council is unlikely to revise this tax rate. The decision to maintain the 28% tax, as reported by Moneycontrol, reflects the council’s firm stance on the issue, emphasizing the need for a uniform taxation policy across the burgeoning online gaming sector.
Amendment to Overrule Retrospective GST Demands
The council will also discuss a proposed amendment aimed at nullifying retrospective GST demands. This amendment seeks to provide clarity and relief to businesses facing past tax liabilities, promoting a more predictable and stable tax environment.
By addressing these retrospective demands, the council aims to foster a business-friendly atmosphere and reduce uncertainty in the tax landscape.
Relief for Reinsurers
Another important agenda item is the potential relief for reinsurers. Reinsurance, the practice where an insurance company transfers part of its risk to another insurer in exchange for a premium, currently faces taxation issues.
The council is expected to consider measures to alleviate the tax burden on reinsurance services, which could enhance the operational efficiency and financial stability of insurance companies.
GST Relief on Fertiliser Companies
The GST Council may review recommendations from the Standing Committee on Chemicals and Fertilisers to reduce GST on fertilisers and their raw materials.
Fertilisers currently attract a 5% GST, while raw materials like Sulphuric Acid and Ammonia are taxed at 18%. The proposed reduction aims to support fertiliser manufacturing companies and farmers, promoting agricultural productivity and economic growth.
Tax Relief for Foreign Airlines
The council is also likely to discuss tax relief for the import of maintenance, repair, and operations (MRO) services for foreign airlines operating in India. Currently taxed at 18%, reducing this rate could encourage more foreign airlines to utilize Indian MRO services, boosting the aviation maintenance sector.
Fuel Inclusion Unlikely
Despite long-standing demands, the inclusion of fuel under the GST regime is not on the agenda for this meeting.
Including petrol, diesel, and other fuels under GST requires unanimous agreement from all states, a challenging task. An official previously indicated to Moneycontrol that there is no current proposal from the GST fitment committee to consider this inclusion.
Conclusion
The 53rd GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, addresses crucial issues impacting various sectors.
From maintaining the 28% tax on online gaming to considering amendments for retrospective GST demands, the council’s decisions will significantly influence India’s tax landscape and business environment.
