GST Council to meet on June 22; Centre likely to take suggestions on Union Budget - Hindustan Times

GST Council to meet on June 22; Centre likely to take suggestions on Union Budget

ByRajeev Jayaswal
Jun 13, 2024 04:19 PM IST

The development came a day after Union finance minister Nirmala Sitharaman took charge of the ministry in the Modi 3.0 government

The 53rd meeting of the Goods and Services Tax (GST) Council will be held in New Delhi on June 22, the finance ministry said on Thursday, indicating that it could give an opportunity for the Centre to consult states on the upcoming Union Budget for 2024-25.

For representational purposes only. (PTI Photo)
For representational purposes only. (PTI Photo)

The development came a day after Union finance minister Nirmala Sitharaman took charge of the ministry in the Modi 3.0 government, and hours before the North Block went on a routine quarantine ahead of the Union Budget, expected in July.

“While the GST Council will take up matters pertaining to indirect taxes, the presence of state finance ministers would give the Centre an opportunity to take suggestions on the budget,” one official said requesting anonymity.

Sitharaman is expected to present the Union Budget in Parliament probably in the third week of July, the official said.

“The next GST Council meeting comes after a significant interval [for the first time in nine months] and will need to take up the keenly awaited discussion on rate rationalisation. In addition to that, a preliminary effort to include low impact petroleum products, such as natural gas, within the GST will be highly beneficial to business,” MS Mani, partner at Deloitte India, said.

The stability established in GST collections, coupled with the fact that GST changes are outside the Union Budget proposals, should provide an impetus to the GST Council in addressing various issues that need to be addressed, Mani added.

According to Rajat Bose, a partner at law firm Shardul Amarchand Mangaldas & Co, the GST council meeting, being the first of the new NDA government, has a full plate of agenda on its hands. There is a need to address key industry issues, such as the taxation of online gaming and the promised review of the valuation rules introduced in October 2023, he said.

“Some items include discussion and feedback from state finance ministers on the Union Budget 2024-25, and other key policy initiatives to be launched by the new government,” Bose said.

Other agenda items could include discussion on the inverted duty structure (IDS) for various sectors, such as textiles and fertilisers, and rationalisation of GST rates on certain items which are used by popular masses in India, he said.

“With GST collections stabilising, added with the flexibility to make changes outside the Union Budget, the Council has an ideal opportunity to effectively address industry concerns. The expected clarifications on critical matters, such as related party free of cost transactions and ESOP taxation, are also indicative of policymakers’ efforts to engage with industry stakeholders and streamline procedures based on feedback,” Mahesh Jaising, partner at Deloitte India, said.

He further said, “With the rise in disputes following the conclusion of audits for initial years, there’s hope within the industry for a review of pre-deposit percentages to align them with the erstwhile service tax regime. Additionally, there’s optimism for an amnesty scheme to resolve disputes from these initial years, helping avoid long-drawn litigation.”

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