The next GST Council meeting will take place on 22nd June 2024 in New Delhi. This will be the first meeting in a new government format and the first one since October 7, 2023. Some of the major concerns that are anticipated to be addressed include the following;.
Key Issues on the Agenda
1. 28% GST on Online Gaming:
The online gaming industry is also expecting that the government will slash the current-imposed 28% GST on online gaming. In many cases the gaming companies have been served with tax notices for previous payments and most of them have and initiated legal actions against such notice. The Council should change this huge tax rate or explain the procedure more thoroughly.
2. Amnesty Scheme for Tax Disputes:
Amnesty scheme has been demanded where companies want the government to agree to their stay proceedings for all pending tax issues. This scheme would enable them to accommodate vexatious complaints that others wanted to take to court without severe penalties thereby decreasing the cases that went to court.
It being so the exposure of the proposed plan could possibly reduce the needed tax pre-deposit to about 7. 5%.
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3. Inverted Duty Structure:
The other important topic of discussion is inverted duty structure or simple tax difference. IDL arises when the tax levied on raw materials is higher than the tax levied on finished products and results in refunds and other issues.
The council will prioritise how this issue can be addressed and make recommendations for general reform, focusing on affected sectors including textiles and fertilisers.
4. Corporate Guarantees Tax Clarification:
It could also obtain clearer rules in regards to the taxation of corporate guarantees when these are provided between affiliated enterprises. Pro as to the tax, there is a discussion on whether it should be levied on the real amount used or the total quantity that has been guaranteed.
They particularly require clear guidelines especially because the authorities announced a new 18% tax on corporate guarantees for loans from parent companies to subsidiaries in October.
5. Rate Rationalisation:
The Council will consider some of the possible reasons why changes to the GST rates for different products may be made. There are suggestions to modify the tax rates on fifteen items but the structure might contain a broader change though at a different period.
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Insights
Online Gaming Impact:
India's online gaming industry is expected to reach $1.5 billion by 2025. However, the high GST rate could slow down growth and investment in this sector.
Tax Dispute Backlog:
Failure to execute an amnesty scheme timely results in a pile of cases concerning tax disputes. The scheme could clear such disputes and afforded relief to businesses and there is an effective scheme, which could do so.
Economic Impact:
Adopting a policy that establishes clear rules for how tax laws apply to corporate guarantees and resolving problems that come with IDS can help alleviate some operations, which result in improved conformity and increased tax revenues.
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Conclusion
The upcoming GST Council meeting is significant for the resolution on various issues being faced by several business stakeholders. Decision makers are being waited by stakeholders in anticipation of achieving clearity and relief after which they will be able to restore the running businesses. This meeting may be a testament to the future policies of GST under a new change of government leadership.
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First GST Council Meeting Under New Government Set for June 22