One of the key
issues to be watched would be a review of 28 per cent GST on online gaming, casinos and horse racing as decided last year. In its meeting dated
July 11 last year, the Council recommended that actionable claims supplied in
casino, horse racing, and online gaming are leviable to a GST rate of 28
per cent and recommended to carry out amendments in the law to remove any
ambiguity. Despite protests from some States, in the subsequent meeting, it was
decided to continue with an earlier recommendation. Later, the law was amended,
and then there was a spurt in the issuance of show-cause notices. Though the
government said that amendments in law are clarificatory in nature and has always maintained that the 28 per
cent rate is applicable from July 1, 2017, online gaming companies alleged
that the amendment in law is retrospective and, accordingly, show-cause notices
have been issued.
The second issue to
watch is the development of rate rejig. Though a Group of
Ministers under the convenorship of Uttar Pradesh’s Finance Minister Suresh
Khanna has yet to finalise the recommendations on rate rationalisation, some
indication is expected on this issue. Also, the GoM itself needs to be
restructured as one of its past members, Vijay Kumar Sinha, is no longer
handling the Finance portfolio in Bihar.
Another issue to
watch is the correction of the inverted duty structure (IDS) for various
sectors, such as textiles and fertiliser. In fact, the
correction for the textile sector has been put in abeyance after much political
opposition. Meanwhile, some relief to the fertiliser companies is also
expected, as recommended by the issuance of a circular for releasing refunds as
a result of the inverted duty structure and subsidy.
Commenting on the likely agenda for next meeting, MS
Mani, Partner with Deloitte India said: “A preliminary effort to include low
impact petroleum products such as natural gas within the GST ambit would be
highly beneficial to business. The stability established in GST collections
together with the fact that GST changes are outside the Union Budget proposals
should provide an impetus to the GST Council in addressing various issues that
need to be addressed.”
According to Rajat Bose, Partner with Shardul
Amarchand Mangaldas & Co, there is a need to address key industry issues
like the taxation of online gaming and the promised review of the valuation
rules introduced in October 2023. Abhishek Jain, Partner with KPMG in India,
feels the taxability of ESOPs, corporate guarantee taxability, and various
rate-related clarifications are also anticipated to be discussed due to recent
litigations. “Another aspect
that most businesses are looking forward to is the new regulations on ISD and
its implementation date,” he said.