NEW DELHI: The GST Council in its next meeting on July 11 may consider increasing the tax rate on items served in the food courts of multiplexes to 12% from the current 5%, according to government sources.
Multiplexes want a higher tax rate as under the 5% rate, they cannot avail of the benefits of input tax credit.
“Earlier the fitment committee had rejected the suggestion of multiplexes, but this time, it is being taken up in the GST council meeting agenda. They want a 12% tax rate on items served in their food courts to get ITC. Under 5%, it’s not possible,” the source said.
He further added that this step would also help the government in garnering more tax revenue due to the increased rate of taxation. In addition, the long-pending issue related to the taxation of online gaming, casinos, and horse racing will also be taken up in the meeting.
“There is no disagreement over the tax rate of 28% on online gaming, however, the contention is on the considerable value for taxation. While the revenue department wants taxation on the full consideration received, some federations are demanding that it should be considered a game of skill and taxed only for the amount utilized,” a top government source said.
Further, he said that the Council would likely decide on the tax rate on Casinos as some states including Goa are demanding 28%, while others want to go for 18%. Besides this, the government will also clarify its position on the taxation of multi-utility vehicles (MUVs).
According to sources, it may bring it at par with the sports utility vehicles (SUVs) on which a 22% cess is levied, if these vehicles cross 4,000 mm in length, have an engine bigger than 1500 cc and have a clearance larger than 170 mm. The decision will have a massive impact on the pricing of MUVs like Maruti Suzuki Eritga, Toyota Innova, Invicto among others, say experts.
Meanwhile, the Council will also give its nod to the operational framework of the GST Appellate Tribunal in its next meeting. “Rules have been framed for the operation of GSTAT, this will be presented before the Council for their clearance. Hopefully, the tribunal will be functional by the end of this year,” another government source said.
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