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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
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