GST Council Meeting (48th)

The 48th GST Council meeting is scheduled on 17th December 2022, Saturday, virtually. Smt Nirmala Sitharaman, the Union Finance Minister, will chair the meeting, and the Finance Ministers of the states/Union Territories are expected to attend. 48th GST Council meeting has been scheduled after a gap of five months, and therefore, there shall be many items on the agenda of the GST Council. The 47th GST Council meeting happened in June 2022.

Agenda for 48th GST Council meeting: The list of items on the 48th GST Council meeting agenda, sis:

• Certain offences under the GST law are set to be decriminalised.
• Setting up of GST appellate tribunal in 2023 and its powers.
• GST rate on health insurance may be reduced from 18% to 12%.
• Defining the scope of power of CCI acting as the Anti-profiteering Authority.
• Changing the GST valuation rules for GST on tobacco
• GST rate panel may clarify tax-related issues. SUV category of vehicles with an engine capacity of 1,500 cc and length of more than 4,000 mm could be levied a 22% compensation cess.
• Carbonated fruit pulp/juice-based drinks may be levied a 28% GST.
• Exemptions may be granted for incentives paid to banks for RuPay debit cards and BHIM-UPI transactions and viability gap funding subsidies payments made to airlines for the regional connectivity scheme.

Key expectations from the meeting

1. Decriminalisation of offences under GST law

The government had indicated in September 2022 that prosecution could be launched against the offenders under the GST law where the value of tax evasion or misuse of input tax credits exceeds Rs.5 crore. Hence, legal proceedings may be initiated against people contravening the GST law. Moreover, if their property value is less than the defined limit, it can never be attached for recovery of GST. Now, a proposal shall be tabled before the GST Council for a change in limit. It may be iRs.20 crore. The GST Council may also remove such penal provisions already governed by the Indian Penal Code (IPC). If the GST Council approves the decriminalisation of the GST law at the 48th GST Council meeting, then the CGST Act shall be amended. These amendments will be tabled before the Parliament during the winter session in December, 2022. After this, the Union Territories and states will incorporate these amendments into their respective GST laws.

2. Setting up of Appellate tribunal

The Centre is having discussions and is planning to set up the Goods and Services Tax Appellate Tribunal (GSTAT) by December, 2023. Hence, it needs a nod to proceed, from the GST Council. The GSTAT shall be set up in different States if the GST Council approves. The primary bench shall be in New Delhi. These benches will hear GST disputes arising in the respective States as currently, the absence of it has put pressure on the local courts to deal with disputes. The appellate tribunal shall be headed by a Supreme Court judge or the Chief Justice of a High Court. Each state bench may have a judicial officer who can be a High Court judge. A senior tax officer who qualifies as a state or centre technical member shall be appointed. Every State can have a maximum of five benches. Also, the State governments may be granted concessions while nominating the technical members, all of which need to be decided by the GST Council at the 48th Council meeting.

3. GST rate changes for taxing health insurance

The GST Council received a representation to reduce the GST rate on the sale of health insurance policies and renewals. Currently, it is taxed at 18%. The new rate, if approved, could be 12%.

Further, the GST Council may look into the report of the Group of ministers (GOM) formed for rate rationalisation measures. Further, the GST rate panel may clarify tax-related issues. SUV category of vehicles with an engine capacity of 1,500 cc and length of more than 4,000 mm could be levied a @ 22% compensation cess.

4. Competition Commission of India (CCI) as the anti-profiteering authority

The GST Council must consider what role the Competition Commission of India (CCI) plays or its powers as the anti-profiteering authority under GST. It will reduce any ambiguity currently being faced by businesses in the industry.

5. Report on taxing online gaming and casinos – Is not on the agenda

The Group of Ministers (GoM) have yet to submit the report on imposing GST on online gaming. It may not be ready before the upcoming Council meeting. Earlier, there were media reports that there was an in-principle agreement by the committee to levy a 28% GST rate on the gross gaming revenue. However,  industry stakeholders were apprehensive about the high GST rate.