GST Council meeting: What to expect from upcoming meet?
The 56th meeting of the Goods and Services Tax (GST) Council is expected to be held in the last week of June or early July, ahead of the Monsoon Session of Parliament.The meeting is likely to take up several important matters, including some long-standing demands from industry groups and state governments.One of the major items on the agenda could be the future of the Compensation Cess. Originally introduced to help states cover revenue shortfalls after the launch of GST, the cess may continue beyond its planned timeline.According to experts, states are still facing revenue pressure and have requested an extension of the cess. 'While this extension provides financial certainty to states, it also means that businesses and consumers will continue to bear the extra cost,' said Shivashish Karnani from DPNC Global's GST division.He added that the Council must also lay out a time-bound plan to eventually phase out the cess, once GST revenues improve.REMOVAL OF 12% GST RATEAnother key expectation from the upcoming meeting is the possible removal of the 12% tax slab. This step would be part of the broader effort to simplify the GST rate structure. Experts believe this move could help reduce confusion for businesses and make compliance easier. However, the decision comes with its own set of challenges.'This would be a big step towards GST rate rationalisation,' said Karnani. 'The main concern will be to decide whether to move current 12% items to 5% or 18%. Lowering them to 5% may reduce government income, while raising them to 18% could affect consumers.' The Council will have to strike a careful balance between revenue needs and simplicity in tax collection.CLARITY ON INTERMEDIARY SERVICESThe GST treatment of intermediary services, especially those dealing with foreign clients, is another area where businesses are hoping for clarity. Many service providers have long argued that they should be treated as exporters and not taxed in India. This has led to ongoing disputes between companies and tax authorities.'There is hope that the GST Council will finally address the issue of intermediary services,' said Karthik Mani, Partner – Indirect Tax, BDO India. 'If these services are treated as exports and made zero-rated, it will not only boost the services sector but also bring an end to the many legal battles happening in courts.' However, he noted that proper foreign exchange must be realised for companies to claim these benefits.GST APPELLATE TRIBUNALBusinesses are also looking forward to an update on the setting up of the GST Appellate Tribunal (GSTAT). Currently, companies have to go to High Courts for appeals because the tribunal has not yet started operations.'This is causing a build-up of pending cases in courts,' said Mani. 'It is important that the GST Council checks the progress on the tribunal and takes steps to make it operational soon.'POSSIBLE RATE CHANGES AND OTHER DECISIONSExperts also expect the Council to review GST rates on several goods and services. These include drones, life and health insurance premiums, and the fees collected by municipalities for services such as Floor Space Index (FSI) approval. Food delivery apps may also come under the scanner for the way they collect and pay GST.'Rate rationalisation on these items is one of the key areas where decisions are expected,' said Mani. 'We may also get clarity on whether the charges collected by local authorities fall under the GST framework.'GST REGISTRATION NORMSThere is also talk of aligning state-level GST registration processes with the Central Board of Indirect Taxes and Customs (CBIC)'s streamlined system. Businesses operating in more than one state often face delays and rejections due to different rules in each state.'If all states follow a common standard for GST registration, it would make things much easier for businesses,' said Karnani. 'It would speed up registration and allow for smoother operations across India.'The previous GST Council meeting took place on December 21, 2024, in Jaisalmer. Since then, many matters have remained pending. Industry groups and tax experts now hope that the upcoming meeting will lead to action on several of these long-standing issues.While the final agenda of the 56th meeting has not been released yet, the discussions are expected to play a big role in shaping the future of India's indirect tax system. - Ends
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India Today
6 hours ago
- India Today
GST Council meeting: What to expect from upcoming meet?
The 56th meeting of the Goods and Services Tax (GST) Council is expected to be held in the last week of June or early July, ahead of the Monsoon Session of meeting is likely to take up several important matters, including some long-standing demands from industry groups and state of the major items on the agenda could be the future of the Compensation Cess. Originally introduced to help states cover revenue shortfalls after the launch of GST, the cess may continue beyond its planned to experts, states are still facing revenue pressure and have requested an extension of the cess. 'While this extension provides financial certainty to states, it also means that businesses and consumers will continue to bear the extra cost,' said Shivashish Karnani from DPNC Global's GST added that the Council must also lay out a time-bound plan to eventually phase out the cess, once GST revenues OF 12% GST RATEAnother key expectation from the upcoming meeting is the possible removal of the 12% tax slab. This step would be part of the broader effort to simplify the GST rate structure. Experts believe this move could help reduce confusion for businesses and make compliance easier. However, the decision comes with its own set of challenges.'This would be a big step towards GST rate rationalisation,' said Karnani. 'The main concern will be to decide whether to move current 12% items to 5% or 18%. Lowering them to 5% may reduce government income, while raising them to 18% could affect consumers.' The Council will have to strike a careful balance between revenue needs and simplicity in tax ON INTERMEDIARY SERVICESThe GST treatment of intermediary services, especially those dealing with foreign clients, is another area where businesses are hoping for clarity. Many service providers have long argued that they should be treated as exporters and not taxed in India. This has led to ongoing disputes between companies and tax authorities.'There is hope that the GST Council will finally address the issue of intermediary services,' said Karthik Mani, Partner – Indirect Tax, BDO India. 'If these services are treated as exports and made zero-rated, it will not only boost the services sector but also bring an end to the many legal battles happening in courts.' However, he noted that proper foreign exchange must be realised for companies to claim these APPELLATE TRIBUNALBusinesses are also looking forward to an update on the setting up of the GST Appellate Tribunal (GSTAT). Currently, companies have to go to High Courts for appeals because the tribunal has not yet started operations.'This is causing a build-up of pending cases in courts,' said Mani. 'It is important that the GST Council checks the progress on the tribunal and takes steps to make it operational soon.'POSSIBLE RATE CHANGES AND OTHER DECISIONSExperts also expect the Council to review GST rates on several goods and services. These include drones, life and health insurance premiums, and the fees collected by municipalities for services such as Floor Space Index (FSI) approval. Food delivery apps may also come under the scanner for the way they collect and pay GST.'Rate rationalisation on these items is one of the key areas where decisions are expected,' said Mani. 'We may also get clarity on whether the charges collected by local authorities fall under the GST framework.'GST REGISTRATION NORMSThere is also talk of aligning state-level GST registration processes with the Central Board of Indirect Taxes and Customs (CBIC)'s streamlined system. Businesses operating in more than one state often face delays and rejections due to different rules in each state.'If all states follow a common standard for GST registration, it would make things much easier for businesses,' said Karnani. 'It would speed up registration and allow for smoother operations across India.'The previous GST Council meeting took place on December 21, 2024, in Jaisalmer. Since then, many matters have remained pending. Industry groups and tax experts now hope that the upcoming meeting will lead to action on several of these long-standing the final agenda of the 56th meeting has not been released yet, the discussions are expected to play a big role in shaping the future of India's indirect tax system. - Ends advertisement
Hindustan Times
11 hours ago
- Hindustan Times
Bizman conned in the name acting gig for kids alongside Dhoni's daughter
MUMBAI: A 31-year-old businessman was duped of ₹ 3.91 lakh by unidentified frauds who claimed they worked with Disney Kids India and said the businessman's son and his niece had been selected to appear in a television commercial alongside Ziva Dhoni, daughter of Indian cricketer MS Dhoni. The frauds asked the businessman for money on various pretexts including buying clothes for his son and niece from fashion designer Ritu Kumar. The businessman came across the advertisement during a visit to a play centre in Lower Parel. (Madhulika Mohan/ Hindustan Times) According to the Matunga police, the complainant, Nirav Gilitwala, runs a physical vapour deposition coating unit in Bhiwandi, known as Ultra Creations, and lives in Dadar along with his wife and three-year-old son. On June 7, when Gilitwala visited Funky Monkeys play centre in Lower Parel along with his wife, son, sister and her five-year-old daughter, he saw an advertisement seeking children for casting in advertisements of Disney Kids India. 'When he contacted the number mentioned in the advertisement, the person on the other side said he was a creative director with Disney Kids India and he could get the businessman's son and niece work in advertisements,' said an officer from Matunga police station. The frauds shared a link with Gilitwala and asked him to upload photos and a one-minute video each of the two children, saying they were required for the purpose of audition. They later told him that his son and niece were among 20 children selected by the agency. 'The businessman was asked to pay a certain amount towards registration charges and goods and services tax (GST). Once he did so, he received a message saying both children had been selected for an advertisement for Cadbury's Oreo biscuits and that they would be working alongside Ziva Dhoni,' the officer said. The frauds subsequently asked for more videos of the children and informed Gilitwala that the shoot would be held over six days and the advertisement would appear on television from July 15. They also sent him a purported memorandum of understanding, which he was asked to sign and send back. 'Later, the frauds told him to pay ₹ 3.25 lakh towards branded clothes designed by Ritu Kumar, which would be required for the shoot,' said the police officer. Once Gilitwala made the payment, he was asked to pay another ₹ 3.25 lakh towards clothes designed by Ritu Kumar. This made Gilitwala suspicious and he discussed the matter with his family, which made him realise that he had been duped. Based on Gilitwala's complaint, the Matunga police registered a first information report (FIR) under sections 318 (4) (cheating) and 319(2) (cheating by personation) of the Bharatiya Nyaya Sanhita, 2023 and relevant sections of the Information Technology Act, said police.
Mint
13 hours ago
- Mint
Cess on that fancy car may go, but prices won't budge. Here's why.
After eight years of piggybacking on India's goods and services tax (GST), the compensation cess levied on sin goods and luxury items may be finally integrated into GST levied on these items. According to two people familiar with discussions in the GST Council, the Union finance ministry is willing to integrate the cess on items like cars, tobacco and aerated drinks into their GST rates. The cess, levied on top of the GST rate, was originally intended to compensate states for potential revenue loss due to the transition to GST. In 2022, it was extended till March 2026 to repay central loans taken to support states during the pandemic. 'The central government backs the integration of the compensation cess into the GST rate structure, which will help boost states' revenue receipts," said the person quoted above. Collection of the cess, which is expected to fetch ₹1.67 trillion this year, ends in March. If the cess is integrated into GST, it will have no effect on the consumer; for eg., an SUV of certain specifications, which currently attracts 22% cess in addition to 28% GST, will have a higher GST rate. Also read | Centre likely to accept Infosys' plea on GST notice However, under GST, the Centre and states collect taxes equally as central GST (CGST) and state GST (SGST). While the states get to keep all of the SGST, the Centre shares a significant portion of its collection with the states. If the cess is integrated into GST, some of it comes back to the states, under a tax-sharing formula set by the Finance Commission. At present, the Centre shares 41% of its tax revenue to the states. In October, the Sixteenth Finance Commission (SFC) led by Arvind Panagariya is expected to recommend the formula for the next five years starting FY27. If the GST Council decision on compensation cess is not ready by the time SFC finalizes its report, the Centre may give SFC more time to accommodate the Council's decision once it is made, the second person quoted above said. 12% The Centre is also prepared to eliminate the 12% GST slab and move the bulk of the items in the bracket to 5% to simplify the GST rate structure and benefit consumers, the person cited earlier said, addin state governments need to be on board as it would mean a seven percentage point reduction on the tax rate on these items. 'The central government is prepared to eliminate the 12% slab and as its fiscal position is robust and stable. It remains to be seen if all the states will back the proposal, particularly, those with stretched public finances," added the person. Queries emailed on Friday to the finance ministry and to the GST Council Secretariat seeking comments remained unanswered at press time. Read this | Mint Primer | GST mop-up: The signals for India's economy & taxes The GST Council chaired by union finance minister Nirmala Sitharaman is expected meet either in the third week of July or after the monsoon session of Parliament to discuss these proposals. The 12% GST slab represents intermediate items which represent less than luxury but more than mass consumption items and include products like cheese, sugar-boiled confectionary, preserved fish, beverages containing milk, apparel priced above ₹1,000 a piece, footwear priced up to ₹1,000 a pair, bricks and clean energy devices. This basket is smaller than the 18% slab comprising manufactured products, but bigger than the 5% slab consisting of mass use items and 28% slab covering items like cars, cigarettes and aerated drinks. The move to eliminate the 12% slab and simplify the tax framework into a three-rate structure of 5%, 18% and 28% marks a strategic and significant step, said Prabhat Ranjan, senior director, indirect taxation at Nexdigm, a business advisory firm. 'It is expected to reduce classification ambiguities, streamline compliance, and enhance overall transparency and clarity within the GST regime. It is consistent with global benchmarks, enhancing tax governance and fostering a more stable and predictable business climate," said Ranjan. 'For consumers, the migration of goods to the 5% bracket could translate into lower prices on several essential and widely used products, thereby improving affordability and stimulating consumption across income segments. This is particularly relevant in the current macroeconomic context, where sustaining demand and managing inflation are key policy objectives," said Ranjan. Also read | ₹2 trillion GST revenue in May, points to strong consumer sentiment, dumping concerns On the other hand, goods moving into the 18% bracket may experience moderate price increases, which could impact consumer sentiment in specific categories, he said. Currently, pharmaceutical products that are essential and life-saving are either exempt from GST or are under the 5% GST rate bracket. Those other than life-saving drugs are currently classified under 12% GST rate bracket. Government should redistribute such essential products from 12% rate bracket to 5% rate bracket only, Ranjan added. State side 'While the Centre's stable revenues support this move, fiscally weaker states may resist due to potential revenue loss. Historically, such cuts have been offset by higher taxes on sin goods like tobacco, pan masala, and cigarettes. A similar balancing act may be necessary to gain consensus within the GST Council," said Rajat Mohan, senior partner at AMRG & Associates. At the GST Council meeting, discussions are likely to deepen not only on rate rationalization but also on broader structural priorities, including the operationalization of GST appellate tribunals, phased implementation of the invoice management system, and regulatory clarity on complex sectors such as online gaming, insurance, and real estate, Mohan said about expectations from the meeting. 'The Council will be tasked with striking a delicate balance—simplifying compliance frameworks, safeguarding revenue neutrality, and addressing the diverse fiscal realities of both developed and revenue-constrained states," added Mohan. And read | Tax rate revamp on GST Council agenda; India to push FATF to grey list Pakistan
