The upcoming meeting of the GST Council is likely to take up a wide range of issues, even as the online gaming companies are hoping for a review of the 28% goods and services tax (GST) on the sector. This includes an amnesty scheme to clear up litigations, exemption over foreign shipping lines and airlines and as well as pre-Budget discussions.
“Typically, a meeting of the GST Council takes place before the Union Budget to have a discussion with states on their concerns and requirements,” cited a person who is familiar with the development. The said person added that the upcoming meeting will also focus on the aforementioned arenas.
Furthermore, as per the sources, the GST Council in its meeting on June 22, is unlikely to reduce the 28% tax on online gaming on actionable claims but could provide certain clarifications around it. A decision around rate rationalization might also not be taken up at present. Also, the Group of Ministers is yet to settle its report with respect to the issue.
Since October 7th 2023, this is the first meeting of the GST Council. Here, expectations are that it will clarify the tax position pertaining to several issues. Having said that, the agenda for the meeting is yet to be dedicated. Additionally, a major issue that surrounds the amnesty scheme for GST can also be taken up when the council meets while the rate of pre-deposit of the tax might also be lowered to 7.5 percent.
“Businesses are urging the GST Council to prioritize an amnesty scheme to clear tax disputes arising from the GST implementation. Delays in such a scheme are causing a backlog of litigation,” highlighted Saurabh Agarwal, Tax Partner, EY adding that this long-awaited amnesty would provide a chance for businesses to settle past tax issues without heavy penalties, thereby reducing the burden of court cases. “While legislative changes are needed, the GST Council should address this as a critical agenda item,” he further added.
The Council is also likely to clarify the GST treatment on foreign airlines and shipping lines. An issue due to which many of them have received tax notices from the Directorate General of GST Intelligence. In addition, the DGGI has been of the view that several services are imported from the parent office by the local entity on which GST has not been paid.
