52nd GST Council Meeting On October 7: All You Need To Know

The 52nd meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman, is going to be held on October 7, 2023, (Saturday) at Vigyan Bhawan, New Delhi. The Council is likely to tweak GST rates on various products, including vehicles bought by visually impaired persons and millet powder. It is also likely to consider a proposal to bring all services provided by Indian railways under the forward charge mechanism shifting from the reverse charge mechanism.

Likely Agenda For 52nd GST Council Meeting:

1. Concessional tax rate of 18% on vehicles purchased by visually impaired persons,

2. Exemption on millets sold in powdered form

3. Proposal to bring all services provided by Indian railways under forward charge mechanism shifting from RCM

4. Clarify levy of tax on bank and corporate guarantees provided by directors and promoters to a company and many more.

According to Reuters report quoting a source, The Council is also likely to discuss exempting distilled alcohol used to manufacture liquor from the indirect tax.

High distilled or extra neutral alcohol contains 95% alcohol by volume and is used for producing liquor and for industrial purposes.

The council will also consider a proposal to lower GST on molasses to 5% from 28%, according to the report.

Sanjay Chhabria, director (indirect tax) at Nexdigm, said, “The constitutional scheme of GST warrants simultaneous levy of tax on supplies of goods and/ or services by the Centre and states. Basis the previous GST council meetings, the amendments to the GST legislation enacted by the Parliament have come into force from October 1, 2023. These include amendments proposed in Union Budget 2023 as well as those relating to taxation of online gaming, casinos and horse racing.”

He, however, added that the corresponding changes to the state and Union Territory GST legislations are yet to come into effect, and this could pose serious challenges to the taxpayers. In fact, the unilateral changes would go against the fabric of ‘one nation one tax’ and the GST Council could consider temporary suspension of implementation while simultaneously urging the member states to pass the amendments at the earliest.

“The official agenda is not yet out in the public domain, nevertheless the media reports suggest that the GST Council will regroup for its 52nd meeting to review the progress made by the states in making amendments to the respective legislations. It is also understood that the ‘All India Gaming Federation’ — the apex body for online gaming in India, has appealed to the Centre to reconsider the Notifications, highlighting the possibility of unilateral actions by various States in the future in relation to various other aspects of GST,” Chhabria said.

Further, the rate rationalisation has been on the Council’s radar for quite some time, and we could see reconstitution of the Group of Ministers to dwell upon this aspect. However, with the general elections around the corner, it would be interesting to see if any reforms are undertaken in this regard, he said.

Previous GST Council

The 51st GST Council, held in August, decided to keep the 28 per cent tax on online gaming, casino and horse racing, and discussed the modalities to implement it. The 51st GST Council meeting was held within less than a month of the previous GST Council meeting on July 11. It discussed the modalities for determining supply value in online gaming and casinos for levying a 28 per cent tax.