The 50th meeting of the Goods and Services Tax (GST) Council was recently held with significant changes to tax rates on various items, introducing the regulation for online gaming sector and decisions related to GST Appellate Tribunals. It was decided that a uniform 28% tax will be imposed on the total value of bets for online gaming, casinos, and horse racing.
Tax Rate Updates by the GST Council
The GST Council decided on various alterations to the tax rates during its recent meet. The tax rate for uncooked or unfried snack pellets and fish soluble paste was reduced from 18% to 5%. For Imitation Zari Threads or Yarn, the tax rate was reduced from 12% to 5%. Food and Beverages consumed inside Cinema Halls will now attract a 5% tax rate without input tax credits, contrasting the previous 18% tax on cinema services.
Tax Treatment for Online Gaming, Casinos, and Horse Racing
Irrespective of whether they involve skill, chance, a combination thereof, or neither, bets and wagers made on online gaming, casinos, and horse racing activities will now be levied a 28% GST. There will be amendments to GST laws to include online gaming within the tax framework.
GST Exemptions
There will be exemptions from GST for cancer-related drugs, medicines for rare diseases, and food products for special medical purposes.
Establishment of GST Appellate Tribunals
The proposal from states to establish 50 Benches of the GST Appellate Tribunals in the country was examined by the Council. The initial Benches will be set up in state capitals and locations where High Courts have branches.
Concerns Raised about GST Network and PMLA
Some states raised concerns regarding the decision to include the GST Network (GSTN) under the Prevention of Money Laundering Act (PMLA), administered by the Enforcement Directorate (ED). It was argued that this inclusion contradicts the interests of taxpayers and the objective of decriminalizing GST offenses. However, it was clarified that it is in line with requirements set by the Financial Action Task Force.
About GST Council
The GST Council is a constitutional body responsible for making recommendations related to the implementation of the Goods and Services Tax (GST) in India. The members of the Council include the Union Finance Minister who acts as the chairperson, the Union Minister of State (Finance) from the Centre, and each state can nominate a minister in-charge of finance or taxation or any other minister as a member.
Functions of GST Council
Under Article 279A (4), the Council makes recommendations on important issues related to GST, such as goods and services to be taxed or exempted from GST, principles that govern place of supply, threshold limits, special provisions for certain States, etc.
UPSC Civil Services Examination Previous Year Questions
Certain questions were examined in the context of the UPSC Civil Services Examination, including the advantages of implementing GST, the rationale behind the Goods and Services Tax (Compensation to States) Act of 2017, the impact of COVID-19 on the GST compensation fund, and the indirect taxes subsumed in the GST. These questions offer valuable insight into the significance and implications of GST in the Indian economic landscape.
Last Modified: February 22, 2024