Union Finance Minister Nirmala Sitharaman with Revenue Secretary Sanjay Malhotra during the 50th Goods and Services Tax (GST) Council Meeting at Vigyan Bhawan, in New Delhi, on July 11, 2023.
| Photo Credit: PTI
The GST Council on July 11 agreed to levy a 28% tax on online gaming, casinos and horse racing and the tax would be levied on full face value. At the 50th meeting of the Goods and Services Tax (GST) Council, the decision was also taken to exempt the following items: cancer-related drugs and medicines for rare diseases and food products for special medical conditions.
Following the meeting, Union Finance and Corporate Affairs Minister Nirmala Sitharaman in a briefing informed that GST rates have been reduced, clarified or regularised on some goods. Decisions were also taken on recommendations of Ministerial groups of the Council.
On four items, rates have been brought down — uncooked, unfried snack pellets (from 18% to 5%), fish soluble paste (from 18% to 5%), imitation zari threads or yarn (from 12% to 5%) and LD Slag to be at par with blast furnace slag and fly ash (from 18% to 5%).
“On five items, we have regularised for earlier periods when some paid, some did not pay due to classification confusion or duality of rates. The Council has taken a call on five such instances that payments for past are regularised,” Ms. Sitharaman said.
These include — taxability of trauma, spino-implants is being regularised from July 18, 2022; raw cotton from agriculturist to co-operatives is taxable and for the past period of confusion. “We are regularising that and will not recover from taxpayers,” she added.
The Finance Minister informed that the scope of taxation has been expanded on SUVs.
“We have given details on which vehicles will be covered. Punjab and Tamil Nadu did not want sedans to be taxed in the same way as SUVs, so we have ensured they won’t be affected,” she said.
Technical changes have also been made to bring GST into alignment with the new Foreign Trade Policy.
On Services, we have offered exemption on GST for satellite launch services provided by private organisations. On the taxability of food and beverages in cinema halls, changes have been made too, Ms. Sitharaman said.
This has now been reviewed twice by the GoM and a lot of stakeholders met the CM of Meghalaya who was the group’s convenor, she said about the GoM recommendations on casinos, race courses and online gaming, which was formed in October 2020
“Today, we have decided to amend the GST law to include online gaming also in it. Simply put, online gaming, horse racing and casinos will be taxed at 28% and they will be taxed on full face value. There can be greater explanations and details given by the Revenue Department later.”
Responding to a question on whether this move will kill the online gaming industry, Ms. Sitharaman said: “All sorts of businesses have to be kept alive. Casinos in Goa and Sikkim yield a lot of revenue for States. When discussions began on this, some one even asked if tax should be lower than food items to promote the casino-catalysed tourism revenues. A discussion also took place on the moral question. No one wants to kill an industry, but they can’t be encouraged to such an extent over essential goods and services.”
A decision was also taken on GST Appellate Tribunals’ appointments and service conditions. “Most States have given their requests on where the benches should be set up and suggestions on the service conditions. There was a complete presentation on the IT system reforms of the GST framework. Largely, these are the decisions.”
Speaking on the compensation released to the States, Ms. Sitharaman said payments have been cleared to the States which have given AG-certified claims. “There are some States whose statements are still awaited and those dues will be cleared, once we get them.”
A stamp was issued by the postal department with a First Day Cover to mark the 50th meeting of the GST Council.
During the meeting, the Finance Ministers of Delhi, Punjab raised the issue about the information that is going to be given by the GSTN under the Prevention of Money Laundering Act. Both the Ministers insisted on having a discussion on this today even before the agenda began, and many of the others also Ministers joined. Ms. Sitharaman said that subsequently a discussion was held on the issue.
Revenue Secretary Sanjay Malhotra gave a explanation on this discussion, saying “This notification has been issued under Section 66 of the PMLA and has nothing to do with the GST law. It is a requirement of the FATF compliance and it was clarified that the tax department will be the recipient of information. There was a doubt that the GSTN is now going to share information with the ED. ED will not be receiving or sharing information. The director of the FIU will share the information with the GST.. This was clarified to them and all of them, I think were quite satisfied with the explanation.”