New Delhi: The formidable GST Council is set to reconvene on June 22, marking its first assembly in eight months and the inaugural meeting since the NDA government reclaimed office. This session promises a dynamic agenda, with pivotal issues such as the tax implications on online gaming—a subject vigorously championed by an influential lobby—likely to feature prominently. However, the meeting may also witness intense debates, particularly as opposition-governed states perceive a weakened central government post the recent electoral mandate.
Despite the BJP’s strengthened position, having secured victories in the Congress-led states of Rajasthan, Chhattisgarh, and Odisha, alongside its ally TDP reclaiming Andhra Pradesh, the political landscape remains contentious. Union Finance Minister Nirmala Sitharaman, with state and UT finance ministers present, will seek crucial inputs for the upcoming Budget.
While the meeting’s agenda remains under wraps, there is heightened anticipation around revisiting rate rationalisation. Previously, recommendations by a ministerial group led by former Karnataka CM Basavaraj Bommai were left unimplemented. Now, under the new chairmanship of Uttar Pradesh Finance Minister Suresh Khanna, these recommendations may re-emerge for consideration.
ITC CMD Sanjiv Puri, the newly appointed president of the industry chamber CII, emphasised the potential inclusion of sectors like petroleum and real estate within the GST framework, advocating for a simplified three-slab structure. As the GST regime approaches its seven-year milestone, there is a growing chorus for reducing the number of slabs and adjusting rates—an agenda the Council had previously deferred.
The impending GST Council meeting is poised to address critical rate rationalisation discussions and consider integrating low-impact petroleum products, such as natural gas, into the GST domain, which would significantly benefit businesses. According to M S Mani, partner at Deloitte India, the current stability in GST collections, coupled with the independence of GST changes from Union Budget proposals, should empower the Council to tackle various outstanding issues.
The industry has highlighted challenges such as inverted duty structures and classification inconsistencies, advocating for rate rationalisation. Abhishek Jain, KPMG’s indirect tax head, anticipates the meeting will clarify numerous issues, including the taxability of online gaming, ESOPs, corporate guarantees, and recent litigations. Businesses are also keenly awaiting new regulations on Input Service Distributor and their implementation timeline.
In conclusion, this pivotal GST Council meeting holds the promise of significant developments and strategic decisions, crucial for the future of India’s tax regime and economic landscape.