The goods and services tax (GST) council which is meeting today is likely to take up host of reforms including conditional waiver of interest or penalty on tax notices issued between 2017 and 2020, empowering the centre and states to quash tax notices on industry specific trade practices and putting a sunset clause on anti profiteering cases.
The council may also decide on reducing the pre deposit for filling appeals to 7% from 10%, may set a monetary threshold for filing appeal in GST Appellate Tribunal and hight court and apex court and may set deadline for issuing summons even in case of willful default.
The proposals once passed would set the ground ready for next level reforms in goods and services tax regime which will complete seven years in July. Also it may open window for relief to insurances, non banking financial services, banks, airlines and shipping companies facing tax demands along with penalties.
Industry may have to wait longer for inclusion of petroleum products under GST, reduction of GST on insurance and the much awaited rate rationalisation.
The council however may reconstitute the group of ministers on rate rationalisation, setting a fresh deadline and mandate and may relook at correcting rate rationalisation on
The council will also deliberate on the fitment committee’s recommendation to refer to taxation on fertilizers to a group of ministers.
Currently, fertilizers attract a GST rate of 5%, while raw materials like Sulphuric Acid and Ammonia face a higher GST at 18%.
The council is expected to review the 28% GST on online gaming companies. While a review of 28% GST is unlikely, the council may take a call on industry’s request to relook into penalty and interest on tax notices issued ahead of October 2023.
The council, which exempted extra neutral alcohol used for human consumption from GST in its previous meeting, is likely to come up with an amendment to implement the decision.
The council is also expected to issue fresh clarification on its decision to levy 18% GST on guarantees provided by corporates to their subsidiaries in the light of stay on the CBIC circular on corporate guarantee by the Punjab and Haryana High Court and is also likely to take up a proposal allowing authorised personnel — instead of only CXO Level executives — to represent companies in cases where summonses have been issued to key management.
To improve compliance further, it may consider the proposal to align the refund of integrated tax paid on export of goods or services under bond or letter of undertaking with provisions under the Foreign Exchange Management Act and will take a call on making biometric based Adhaar authentication mandatory for risky taxpayers across the country.
It may take up the proposal to issue a unique identifier for unregistered people opting to generate e-way bills.
The council is likely to come up with clarification on about a dozen issues including taxability of loans given by one group company to another, determination of the place of supply applicable for custodial services provided by banks to foreign portfolio investors
It will take up provisions of tax collected at sources on ecommerce service providers.
