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It is almost four months since last meeting took place but there is still no indication about when the next meeting will happen. Technically, the meeting should be held at least once in three months. Experts feel that delay in holding the meeting is likely to have an impact on reform measures and new initiatives under GST.
Rule 6 of the Procedure and Conduct of Business Regulations of the Goods and Services Tax (GST) says “The Council shall meet at least once in every quarter of the financial year.” Going by this rule, the next meeting should have been taken place by September 30.
Fixing date
A key reason for not fixing a date is delay in reworking of report by group of ministers (GoM) on online gaming, Casinos & Horse Racings. This along with a report by another GoM on setting of GST Appellate tribunals is key agenda items to be taken up in next meeting.
The last meeting took place in June 28 and 29. At the end of that meeting, it was announced that next meeting will take place during the first week of August at Madurai. Since then, there was no information about when exactly the meeting will take place. It is not the first time, when three months period is going to end without a meeting. Earlier, there was gap of over 6 months between the 42nd meeting (Oct 5 & 12, 2020) and 43rd meeting (May 23rd, 2021).
Tax claims
Commenting on the delay, Prateek Bansal, Associate Partner (Tax & Custom) with law firm White & Brief said that while the uncertainty qua taxation of online gaming industry is leading to flurry of tax claims thereby increasing litigation, “the delay in constitution of the GST Appellate Tribunal and absence of a national appellate forum for advance rulings is adding to the already overburdened dockets of the Courts.”
Taking it forward, Sakte Patwari, Executive Director with Nexdigm said that while on one hand, the GoM has sought legal opinion on the applicable rate and valuation base to be considered for levying GST on online gaming, the DGGI has, on the other hand, initiated recovery proceedings worth ₹21,000 crore against a Bengaluru-based online gaming company.
GST exemption
On other issues, Patwari said that GST Council should look into the extension of GST exemption to the logistics industry, given that GST has been made applicable to transportation services involving movement of goods from India to outside India w.e.f. 1 October 2022. “The withdrawal of exemption has put the Indian logistics service providers at a disadvantageous position as compared to foreign service providers,” he said.
For Bansal, pending list includes GST rate rationalisation, accumulation of ITC due to inverted duty structure on textiles segment, etc. “Delay in adopting corrective measures for textile industry is causing huge blockage of working capital of the businesses, besides encouraging imports of the synthetic textiles,” he said. Further, he said that term of National Anti-profiteering Authority is coming to end by next month and many of its rulings have been challenged in the court. However, l there is no clarity on what the new framework of the anti-profiteering mechanism would be.
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