NEW DELHI: The Goods and Services Tax (GST) Council will convene its first meeting under the newly-formed government on June 22, 2024. This meeting comes after a hiatus of nearly nine months since the 52nd meeting held on October 7, 2023.
There are several pending issues before the Council that need to be addressed. The online gaming industry has been awaiting review of 28% GST applicable on the sector. A number of online gaming companies are grappling with GST notices for the payment of taxes related to past years. Many of them have even filed writ petitions against such notices.
Besides this, clarity needs to be issued on the inverted duty structure (IDS) for various sectors including textiles and fertlizers, so this too can be discussed in the meeting, according to experts. Meanwhile, GST rate rationalisation on certain items could also be taken up in the 53rd GST Council meeting.
Also, the Council may issue clarifications regarding the taxability of corporate guarantee under the GST law between related parties.
The debate revolves around the calculation of taxable value based on actual amount utilised by the beneficiary when the guaranteed amount exceeds the utilisation. In addition, there is a call for clarity on whether this change should apply prospectively or retrospectively. In October, the GST Council had announced corporate guarantees for bank loans given by the parent company to its subsidiary would attract 18%.
Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co, said, “The GST Council meeting scheduled on June22, being the first of the new government, has a full plate of agenda items on its hands. There is a need to address key industry issue like taxation of online gaming and the promised review of the valuation rules introduced in October 2023. Other items include discussion and feedback from state finance ministers on the Union Budget of 2024 and other key policy initiatives to be launched by the new government.”
In addition, Abhishek Rastogi, founder of Rastogi Chambers, said,“There are certain key issues such as tax on online gaming, blocked credit for real estate sector, valuation for corporate guarantee, cross charges and denial of credit when vendors have defaulted, which are expected to be pragmatically addressed by the GST council.”
Pending issues
There are several pending issues before the Council that need to be addressed. The online gaming industry has been awaiting review of 28% GST on the sector. Many online gaming companies are grappling with GST notices for payment of taxes related to past years