50th GST Council Meet: A Review of the Latest Tax Reforms

The Goods and Services Tax (GST) Council has put forth a flurry of new recommendations to reform the GST system, ease taxpayers’ compliance, and deter fraudulent activities. This article will delve into the key aspects of these recommendations.

Gambling Industry Taxation

The Council has suggested a harmonized tax rate of 28% on all types of gambling. The new rate is to apply to Casinos, Horse Racing, and Online gaming, based on the full face value of the bets placed.

Formation of GST Appellate Tribunal

To address disputes related to the GST, the Council recommended that the Central Government activate the GST Appellate Tribunal effective August 1, 2023. In conjunction, the GST Appellate Tribunal Rules were also laid out, focusing on the rules that govern the appointment and working conditions of the tribunal.

Relief Measures for Healthcare and Special Medical Food Products

GST exemptions are proposed for specific medications, including cancer drugs, medicines for rare diseases, and food products for special medical purposes. The aim of these exemptions is to make necessary treatments more accessible for patients.

Reduction of GST Rates on Selected Items

Four specific items are proposed to reduce their GST rates from 18% to 5%. These include uncooked, unfried & extruded snack palettes, fish soluble paste, LD slag (equivalent to blast furnace slag), and imitation zari thread.

Streamlining GST Compliance Procedures

A set of measures were proposed to simplify the GST compliance process. These include the following:

• Continuing the relaxations provided in FY 2021-22 for various tables of FORM GSTR-9 and FORM GSTR-9C for FY 2022-23.
• Exempting smaller taxpayers with an aggregate annual turnover of up to two crore rupees for FY 2022-23 from filing an annual return.
• Introducing an amendment to make the Input Services Distributor (ISD) mechanism mandatory prospectively.

Promotion of Private Space Industry

Satellite launch services provided by private sector organizations, equivalent to those offered by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL), are recommended for GST exemption. This move aims to foster growth and innovation in space start-ups.

Other Key Recommendations

Among other important recommendations are:

• A proposal suggesting that the Goods Transport Agency (GTA) won’t need to file declarations for GST payment under forward charge every year.
• A mechanism to handle the differences in Input Tax Credit between FORM GSTR-2B and FORM GSTR-3B to reduce ITC mismatches and misuse.
• Proposals for amendments in annual return filing, sharing of information of registered persons, and the introduction of special procedures for certain circumstances.