28% Tax On Online Gaming Firms: FM Said In 50th GST Council Meeting

On 11th July 2023, Finance Minister Nirmala Sitharaman chaired the 50th GST Council meeting in the presence of the ministers of different UT and states. The Council also looked at State recommendations for the establishment of 50 Benches for the long-awaited GST Appellate Tribunals around the nation. 

The government has stated that benches will be established in state capitals and locations where high courts have benches, to begin for the statutory authorities to resolve the increasing GST issues to become operational within four to six months. 

The Council approved the president of the tribunal's appointment and service requirements, which will take effect on August 1.

The Council's first gathering since February got off to a rocky start. The recent move by the Union government to include the GST Network in the scope of the Prevention of Money Laundering Act (PMLA), which is overseen by the Enforcement Directorate (ED), was challenged by representatives of States not governed by the BJP. The Finance Ministers of Punjab and Delhi took the lead in the debate.

Many States had expressed worry over the matter, according to Ms. Sitharaman, who presided over the meeting, and it was discussed after the items on the scheduled agenda were finished. For instance, Tamil Nadu claimed that including GSTN within PMLA provisions goes against taxpayer interests and the fundamental goal of decriminalizing violations under the GST statute.

"The State government's press statement expressed opposition to the move, stating that it would particularly impact dealers nationwide, especially those operating on a smaller scale."

"The Revenue Secretary, Sanjay Malhotra, provided an explanation of the new provision to the Council, noting that the members appeared to be satisfied with the explanation."

"Mr. Malhotra clarified that the issued notification, under Section 66 of the PMLA, is unrelated to the GST law and is a requirement of the Financial Action Task Force. The evaluation process is currently underway."

"To address concerns about the sharing of private business information with law enforcement agencies, including the ED, Mr. Malhotra confirmed that the ED would neither receive nor provide information. He further explained that the notification would empower tax authorities with additional information. The director of the Financial Intelligence Unit would provide information to the GSTN, which can be utilized by the authorities in cases of potential tax evasion or money laundering."

"The GST rate unfried snack and food pellets, as well as fish soluble paste, has been slashed from 18% to 5%. Additionally, imitation zari threads or yarn will now attract a 5% GST instead of the previous 12% rate. The Council also decided that food and beverages consumed within cinema halls will be subject to a 5% GST without any input tax credits, compared to the previous 18% levy on cinema services."

"In response to the concerns expressed by Tamil Nadu and Punjab regarding the increased cess imposed on SUVs and its potential impact on sedans, the Council provided clarification on the tax treatment. The conditions for a vehicle to be categorized as an SUV with a higher compensation cess were revised. Previously, the vehicle had to be generally considered an SUV, be longer than four meters, have an engine capacity of 1500 cc or more, and have a ground clearance of 170 mm. However, the condition that the vehicle should be popularly seen as an SUV was removed, and it was clarified that the ground clearance of 170 mm should be of an unladen vehicle."

Also Read: ITR Filing Deadline Is Approaching: Don’t Wait For The Last Minute