The much-awaited GST Council meeting will be held in Chandigarh on Tuesday and Wednesday. The council is likely to take up issues such as change in rates on a handful of items, including diamonds and ostomy instruments. The report of a Group of Ministers (GoM) on imposing 28 per cent tax on online gaming, casino and horse racing is also expected to be discussed. Here is all about the GST Council and its ongoing two-day meeting.
What is GST Council?
The GST Council, constituted in 2016 after the insertion of Article 279A(1) of the Constitution to implement the Goods and Services Tax (GST), is the highest decision-making body for the indirect tax regime in the country. It is headed by the Union Finance Minister (currently Nirmala Sitharaman) and consists of the Finance Minister or other representatives of all the states and union territories. The Revenue Secretary is the ex-officio Secretary of the GST Council and the Secretariat office is located at New Delhi.
The council makes recommendations to the Center and states on issues related to GST, such as whether goods and services can be subject to or exempted from GST, model GST laws, principles that govern place of supply, ceiling limits, GST rates including floor Rates with bands, special rates for raising additional resources during natural calamities/disasters, and special provisions for certain states, etc.
The recommendations of the GST Council are based on a three-fourth majority of the members present and voting. The votes of the central government are counted as one-third, while the weight of the total votes of the states is two-thirds.
Till now it has had 46 meetings. This is the 47th meeting of the GST Council, which will be held in Chandigarh on Tuesday and Wednesday and the result will be announced on the last day of the meeting (Wednesday).
Are the recommendations of the GST Council binding on the government?
No, the Supreme Court in its latest judgment last month said that the GST Council is only a recommendatory body and its recommendations are not binding on the Center or the states. The top court said the recommendations of the council will have “motivational value” and both Parliament and state legislatures can legislate equally on matters related to GST.
Issues that can be discussed in the current meeting of the GST Council
The council is likely to discuss the change in rates on certain items recommended by the fitment committee. The committee has reportedly recommended reduction of GST rates on ostomy devices (including pouch or flange, barrier cream, sleeve, irrigation kit, micro-pore tape, stoma adhesive paste, belt) from 12 per cent to 5 per cent. . It has proposed a flat 5 per cent GST on prostheses (prostheses), orthopedic implants (trauma, spine, and body arthroplasty implants), and orthoses (braces, splints, belts and calipers).
The council will also take up the issue of levying 28 per cent GST on online gaming, casinos and horse racing. A Group of Ministers (GoM) constituted in June last year under the leadership of Gujarat Deputy Chief Minister Nitinbhai Patel had recommended the imposition of GST on online gaming, casinos and horse racing. The GoM was reconstituted in February this year and Meghalaya Chief Minister Conrad Sangma was made the convener of the panel.
The GOM recommends that online gaming be taxed on the full value of consideration, including competition entry fees paid by the player upon participation in the game. In the case of Race Course, it said that GST should be levied on the full value of bets deposited in the totalizer and kept with the bookmakers; While at the casino, the GOM recommends that the full face value of chips/coins purchased by a player from the casino be taxed as well. There will also be 28 per cent GST on the entry/access fee to the casino, which compulsorily includes food items/beverages etc.
It is also likely to waive the requirement of filing refund claims between March 1, 2020 and February 28, 2022, in view of the disruptions caused by the coronavirus pandemic. The council may also consider imposing a 28 percent goods and services tax on cryptocurrencies at its next meeting. Changes in the law to facilitate the provision for setting up of GST tribunals are also expected to be discussed.
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