Context:

The 50th meeting of the Goods and Services Tax (GST) Council has been held commemorating a significant milestone in the journey of Goods and Services Tax (GST).

Constitution of Appellate Tribunals and the Tax treatment for the online gaming industry

Key Outcomes of GST Council meeting:

• Establishment of Appellate Tribunals:
  • Appointment norms: The appointment norms for tribunal members have been cleared, and the government has assured that the first set of tribunals will be operational within four to six months. 
  • Tribunal benches: The states have proposed the creation of 50 tribunal benches, which will be set up gradually, starting with state capitals and cities with High Court benches.
  • Significance: It may expedite the resolution of the increasing number of GST litigations burdening the courts.
• Online gaming industry:
  • Uniform Taxation: Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28% on full face value.
  • Concerns: 
    • Businesses: Disappointment over the Council’s choice to implement a 28% GST levy on the face value of all bets in online games, casinos, and horse racing.
    • e-gaming players:  Consider it detrimental to the flourishing industry and its numerous job opportunities. 
    • Casino-driven economies: The heavy reliance of Goa and Sikkim on casino-driven tourism revenues. 
• Goods and Services Tax Network (GSTN):
  • Inclusion of Goods and Services Tax Network (GSTN) under the purview of the Prevention of Money-laundering Act (PMLA).
  • Significance:  It is one of the requirements under the Financial Action Task Force (FATF) as it will empower our tax authorities with more information.
  • Concerns: There were doubts that GSTN will start sharing information about private businesses to other law enforcement agencies.
• GST for food and beverages in cinema halls:
  • Reduction in GST: For instance, food and beverages in cinema halls will now attract a lower 5% GST, similar to unfried, uncooked snack pellets, fish soluble paste, and imitation zari yarn. 
• Other tax reductions: Bringing down rates from 18 percent to 5 percent on 4 items – 
  • Uncooked, unfried & extruded snack palettes
  • fish soluble paste
  • Linz-Donawitz(LD) slag (at par with blast furnace slag)
  • imitation zari thread.
• GST exemptions:
  • IGST exemption for Dinutuximab (Quarziba), medicines and Food for Special Medical Purposes (FSMP) when imported for personal use subject to existing conditions. 
  • Extension of exemption to Food for Special Medical Purposes (FSMP) imported by Centres of Excellence for Rare Diseases or any institution or person on recommendation of such listed Centres of Excellence.
• Measures for streamlining compliances in GST:
  • Changes were also proposed to simplify compliance for Goods Transport Agencies (GTAs) and clarify the taxability of services provided by directors of companies to their respective companies.

Conclusion: 

• The recent GST Council meeting addressed various issues such as Appellate Tribunals and tax treatment for the online gaming industry, there are concerns that the Council has shifted its focus away from the promised overhaul of GST rates. 
• Additionally, no successor has been named to lead the ministerial group on rate restructuring. 
• The impact of specific decisions on different sectors will depend on the details, but the Council’s future meetings may be less frequent due to the upcoming poll season.

News Source: The Hindu