2024-09-11 08:27:19
The Council’s recommendations encompass a wide array of initiatives, starting from rationalization of GST rates on various goods and services and regularizing the past period on ‘as-is where-is basis’ to avoid any future litigation like in case of film distribution service, provide exemptions on research and development services and reducing tax rates on cancer drugs.
The GST council also brought about changes in the law and rates to rectify unintended levies and demands starting with exempting import of services by an establishment of a foreign airlines company from a related person outside India, when made without consideration and regularizing past cases on an ‘as is where is’ basis thereby putting to rest the huge demands that were raised on foreign airlines in the recent past. Further, clarifying the place of supply in case of advertising services and data-hosting services when provided to foreign entity to be the location of recipient thereby to be treated as export of services, are all decisions that will help resolve multiple ongoing litigations and provide the much-needed relief to the respective industries.
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Another key outcome of the council meeting was the formulation of two new GoMs which have been created to find possible solutions to some critical issues, namely – GoM on life and health insurance and GoM to study the future of compensation cess with the mandate to present their findings by Oct 24 end to enable the council to deliberate on the same and achieve consensus.
GoM has further made an effort to streamline the metal industry by accepting their long standing demand of making the payment on reverse charge for supply of metal screap from unregistered dealers. However, given that intermediate dealers may be unregistered there is a possibility of substantial cascading in certain situations. Accordingly, the fine print is awaited to understand the complete implications.
The introduction of e-invoicing for B2C transactions is a major step towards streamlining compliances and moving towards refunds for goods purchased and exported by foreign tourists. Also, the IMS system is a major step to bring efficiency in credit availment and was proposed in the initial implementation of the GSTN portal, but deferred due to technical issues. However, there is a need to make explicit provisions under law to give it a legal backing. Both these changes will take compliances to a new level and would bring maturity to the current GST processes.
Here’s everything Finance Minister Sitharaman and the GST Council decided
With every meeting, the council takes a step towards streamlining and resolving disputes under the GST law. While a lot has already been achieved by the Council, the same is a continued journey of democratized decision making. While the decisions taken by GST Council are a testament to the government’s commitment to fostering a conducive business environment, it is the need of the hour that the council develops a long-term vision for this tax.
There are two main areas which require council’s immediate attention – the first is re-evaluation of ITC admissibility, which will not only require a complete re-look at Section 17(5) of GST law which restricts credits in some cases but also look at sectors where credits have been restricted to keep the rates low.
The second area which requires immediate attention is the multiplicity of audits, assessment and investigations being carried out on large corporates across the country. Multiple organizations, as part of their revenue augmentation targets, audit and investigate the corporates, most of them having multiple registrations in various jurisdictions. It is time that the council re-formulate the audit process to have centralised coordinated audits with possible rotation between centre and state.
The GST Council’s proactive approach in addressing the concerns of industry is a reassuring sign of the government’s dedication to making India an easier place to do business. The nation now looks forward to the findings of the GoMs which are set to pave the way for a more streamlined and efficient tax system, ultimately contributing to the overarching goal of ease of doing business in India.
(Bipin Sapra is a Tax Partner at EY India. Swati Saraf Pahuja, Senior Tax Professional, EY India also contributed to the article)
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Table of Contents
- 1 Here are some PAA (People Also Ask) related questions for the title “GST Council: A Step Towards Streamlining and Resolving Disputes Under GST Law”:
- 2 Here are some People Also Ask (PAA) related questions for the title: **GST Council Meeting: Key Takeaways and Proactive Approach to Streamline GST Law**:
GST Council: A Step Towards Streamlining and Resolving Disputes Under GST Law
The 54th GST Council meeting has concluded, and the outcomes are a testament to the government’s commitment to fostering a conducive business environment. The Council has taken significant steps to rectify industry pain points, rationalize GST rates, and provide exemptions on various goods and services. In this article, we will delve into the key takeaways from the 54th GST Council meeting and their implications on the economy.
Rationalization of GST Rates and Exemptions
One of the notable decisions taken by the GST Council is the rationalization of GST rates on various goods and services. The Council has reduced tax rates on cancer drugs, making them more affordable for patients. Additionally, exemptions have been provided on research and development services, which will encourage innovation and growth in the sector.
Rectification of Unintended Levies and Demands
The GST Council has also taken steps to rectify unintended levies and demands. For instance, the import of services by an establishment of a foreign airlines company from a related person outside India has been exempted, providing relief to foreign airlines. Furthermore, the place of supply in case of advertising services and data-hosting services has been clarified, which will help resolve ongoing litigations and provide relief to industries.
Formulation of Two New GoMs
The GST Council has formed two new Groups of Ministers (GoMs) to address critical issues. The first GoM will focus on life and health insurance, while the second GoM will study the future of compensation cess. Both GoMs have been mandated to present their findings by October 24, enabling the Council to deliberate and achieve consensus.
Streamlining of Metal Industry
The GST Council has accepted the long-standing demand of the metal industry to make payment on reverse charge for supply of metal scrap from unregistered dealers. This move will help streamline the metal industry and reduce complexities.
Introduction of E-Invoicing and IMS System
The GST Council has introduced e-invoicing for B2C transactions, which will streamline compliances and move towards refunds for goods purchased and exported by foreign tourists. Additionally, the IMS system will bring efficiency in credit availment, making GST processes more mature.
Need for Long-Term Vision
While the GST Council has made significant progress in streamlining and resolving disputes under the GST law, it is essential to develop a long-term vision for this tax. There are two main areas that require immediate attention: re-evaluation of ITC admissibility and multiplicity of audits, assessment, and investigations.
Conclusion
The 54th GST Council meeting has taken significant steps towards resolving industry pain points and streamlining GST processes. The Council’s recommendations will help resolve ongoing litigations, provide relief to industries, and foster a conducive business environment. As the Council continues to take steps towards democratized decision making, it is essential to develop a long-term vision for this tax.
GST Council vs. Global Sustainable Tourism Council (GSTC)
It is essential to note that the GST Council is different from the Global Sustainable Tourism Council (GSTC), which is an international organization that manages global standards for sustainable travel and tourism [1]. The GSTC acts as an international accreditation body for sustainable tourism certification.
In contrast, the GST Council referred to in this article is a part of the Indian government’s Goods and Services Tax (GST) regime, which is a value-added tax levied on goods and services [2]. The GST Council is responsible for making recommendations on GST rates, exemptions, and other related matters.
GST Council Meeting: Key Takeaways and Proactive Approach to Streamline GST Law
The 54th GST Council meeting concluded recently, marking another significant step towards streamlining and resolving disputes under the GST law. The council’s recommendations encompass a wide array of initiatives, including rationalization of GST rates on various goods and services, regularization of past period on ‘as-is where-is basis’ to avoid future litigation, and exemptions on research and development services and cancer drugs [1[1].
Rectifying Unintended Levies and Demands
The council brought about changes in the law and rates to rectify unintended levies and demands. Notably, they exempted import of services by an establishment of a foreign airlines company from a related person outside India, when made without consideration, and regularized past cases on an ‘as-is where-is basis’ [1[1]. This move is expected to provide relief to foreign airlines that faced huge demands in the recent past.
Formation of GoMs for Long-term Policy Corrections
The council meeting witnessed the formulation of two new GoMs to find possible solutions to critical issues. The GoM on life and health insurance and the GoM to study the future of compensation cess have been created to present their findings by October 24, enabling the council to deliberate and achieve consensus [1[1].
Streamlining Metal Industry and Introducing E-Invoicing for B2C Transactions
The council accepted the long-standing demand of the metal industry to make payments on reverse charge for supply of metal scrap from unregistered dealers. However, the fine print is awaited to understand the complete implications [1[1].
The introduction of e-invoicing for B2C transactions is a significant step towards streamlining compliances and moving towards refunds for goods purchased and exported by foreign tourists. The IMS system, proposed in the initial implementation of the GSTN portal, is expected to bring efficiency in credit availment [1[1].
GST Council’s Proactive Approach
With every meeting, the council takes a step towards streamlining and resolving disputes under the GST law. While a lot has already been achieved, the council’s proactive approach in addressing industry concerns is a reassuring sign of its commitment to fostering a conducive business environment [1[1].
Future Roadmap
There are two main areas that require the council’s immediate attention: the re-evaluation of ITC admissibility and the multiplicity of audits, assessment, and investigations being carried out on large corporates across the country. The council needs to develop a long-term vision for this tax and reformulate the audit process to have centralized, coordinated audits with possible rotation between center and state[[[1](https://m.economictimes.com/news/economy/policy/
