The much-awaited GST Council meeting will take place in Chandigarh on Tuesday and Wednesday. The Council is likely to take up issues such as rate changes on a handful of items, including diamonds and ostomy appliances. It is also expected to discuss a group of ministers’ (GoM) report on the imposition of a 28 per cent tax on online gaming, casinos and horse racing. Here’s all about the GST Council and its ongoing two-day meeting.
What is GST Council?
The GST Council, formed in 2016 after inserting Article 279A (1) of the Constitution to implement the goods and services tax (GST), is the highest decision-making body for the indirect tax regime in the country. It is headed by the Union finance minister (currently Nirmala Sitharaman) and comprises finance ministers or other representatives of all states and Union Territories. The revenue secretary is the ex-officio secretary to the GST Council and the secretariat office is situated in New Delhi.
The Council makes recommendations to the Union and the states on issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST laws, principles that govern the place of supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/ disasters, and special provisions for certain states, among others.
The recommendations of the GST Council are based on a three-fourth majority of the members present and voting. The central government’s vote counts as one-third, while the weightage of the states’ total votes are two-thirds.
It has conducted 46 meetings so far. This is the 47th meeting of the GST Council, which will take place in Chandigarh on Tuesday and Wednesday, and its outcome will be announced on the last day of the meeting (Wednesday).
Are GST Council’s Recommendations Binding On Govt?
No. The Supreme Court in its latest ruling last month said the GST Council is only a recommendatory body and its recommendations are not binding on the Centre or states. The apex court added that the Council’s recommendations will have a “persuasive value” and that both Parliament and the state legislatures can equally legislate on the matters related to GST.
The Issues That May Be Discussed In GST Council’s Current Meeting
The Council is likely to discuss rate changes on a few items recommended by the Fitment Committee. The committee has reportedly recommended reducing GST rates from 12 per cent to 5 per cent on ostomy appliances (including pouch or flange, barrier cream, sleeves, irrigator kit, micro-pore tapes, stoma adhesive paste, belt). It has also proposed a flat 5 per cent GST on prostheses (artificial limbs), orthopaedic implants (trauma, spine, and arthroplasty implants in body), and orthoses (braces, splints, belts & calipers).
The Council will also take up the issue of imposing 28 per cent GST on online gaming, casinos and horse racing. A group of ministers (GoM) as constituted last year in June under Gujarat Deputy Chief Minister Nitin Bhai Patel to recommend the imposition of GST on online gaming, casinos and horse racing. The GoM was reconstituted in February this year and Meghalaya Chief Minister Conrad Sangma was made the convenor of the panel.
The GoM has recommended that online gaming should be taxed at the full value of the consideration, including contest entry fee paid by the player on participating in the game. In the case of race courses, it said GST should be levied on the full value of bets pooled in the totalisators and placed with the bookmakers; while in casinos, the GoM recommended the tax be also levied on the full face value of the chips/coins purchased from the casino by a player. There will also be 28 per cent GST on entry/access fees into casinos, which compulsorily includes foods/beverages etc.
It is also likely to waive the requirement for filing refund claims between March 1, 2020, and February 28, 2022, in view of the disruptions caused by the coronavirus pandemic. The Council during its next meeting is also likely to consider levying a 28 per cent goods and services tax on cryptocurrencies. It is also expected to discuss changes in law to facilitate provision for setting up GST Tribunals.
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