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What's the article about?
- Recently, the 50th GST Council meeting took place.
Relevance:
- GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment;
- GS2: Statutory, Regulatory and various Quasi-judicial Bodies;
- Prelims
Context:
- The 50th GST Council meeting was held on July 11th, 2023, at Vigyan Bhawan in New Delhi.
What are the major decisions taken in the 50th GST Council meeting?
- Tax exemption on medicines for rare health ailments and cancer drugs was approved.
- The GST rate of 28% will be levied on the full face value of online gaming, horse racing, and casinos, without any distinction between the face value and the commission charged by the operator.
- The Council discussed and voted on several fitment committee recommendations, resulting in lower GST rates for various goods and services.
- The classification of utility vehicles and taxation on them was also discussed during the meeting.
- The establishment of Goods and Services Tax Appellate Tribunals (GSTATs) was discussed to streamline and expedite indirect tax litigations.
- These decisions aim to bring about changes in tax rates, exemptions, and the overall functioning of the GST system.
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GST Council:
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Analysis:
- Tribunal:
- With the appointment norms for tribunal members cleared, the Centre has given an assurance that the first set of tribunals should become operational in four to six months.
- While States have proposed 50 tribunal benches, these will come up in a phased manner, beginning with State capitals and cities with High Court benches. Industry may hope for quicker redress of mounting GST litigations clogging up courts.
- GST on games:
- Businesses have reacted with much consternation to the Council’s decision to finalise a 28% GST levy on the face value of all bets placed in online games, casinos or horse-racing, with many e-gaming players terming it a death knell for the growing industry and its thousands of jobs.
- This was not a hasty decision, having been considered by a ministerial group of the Council not once, but twice since its formation in late 2020.
- The Finance Minister said the Council acknowledged that Goa and Sikkim rely heavily on casino-driven tourism revenues, but also examined the moral question of whether this can be equated to the more compassionate tax treatment warranted for essential goods and services.
- Other developments:
- The Council also granted tax exemptions, reduced or clarified some rates and regularised past incongruencies in tax payments on some items owing to confusion about their classification.
- Exempting drugs imported for cancer and some rare diseases, for instance, could have been envisaged earlier as well, just as the intended higher tax levy on sport utility vehicles could have been.
- Dissuading the use of larger personal vehicles is an obvious necessity for a country where traffic congestion is intense and widespread.
Way Forward:
- To keep up the spirit of federalism and to achieve faster economic growth, the GST council should meet more often.
