GST Council meeting June 2024: Key expectations on revision in tax slabs and exemptions

By: Admin
June 19, 2024
Categories: GST Recent News
4 Min Read

The upcoming GST Council meeting scheduled for June 22 has sparked considerable interest in the market. Many are hopeful that significant changes may be announced, especially given its timing just before the Budget.

Experts anticipate a review of the GST slabs, with discussions centered around potentially reducing the number of slabs from four to three.

There is a expectation that the 12% slab might be eliminated, with items being redistributed into the 5% and 18% slabs. This move could streamline tax rates and simplify compliance for businesses.

CNBC-TV18 learns that fertilisers may not be fully exempt from GST because the industry is complaining that it will lead to duty inversion and therefore a locking up of capital.

Meanwhile, gaming companies and NBFCs are also nursing hopes of GST exemptions or reductions.

Vivek Johri, former Chairman of CBIC, says the issues currently under consideration by the Council primarily require legislative amendments.

He also noted that regarding the restructuring of tax rates from four slabs to three, a group of ministers had been established earlier.

However, he indicated that the final report from this group, chaired by the finance minister of Uttar Pradesh, has not yet been submitted.

Johri suggested that the Council may prefer to await the recommendations from this group before making final decisions.

He clarified that this process does not necessitate legislative amendments and could be implemented administratively, cautioning against expecting swift progress on this front.

An expert, observed that the upcoming GST Council meeting marks a significant gap of eight to nine months since the last session, which is uncommon compared to the more frequent meetings held in recent years, occurring every three to five months.

He emphasised the necessity for more frequent meetings, considering GST’s nature as a transactional and business tax, essential for addressing various business-related issues.

He advised tempering expectations for this particular meeting due to its extended interval, predicting a busy agenda.

He highlighted that fertilisers are likely to be a major agenda item, noting a shift in industry sentiment against full exemption due to potential issues with inverted duty structures.

He also pointed out the complexities arising from recent investigations, which have led to substantial demands on companies, both listed and unlisted.

He suggested that many businesses will seek clarity and guidance from the GST Council regarding these matters during the upcoming meeting.

Regarding Non-Banking Financial Companies (NBFCs), he is concerned about the inclusion of co-lending under GST, an issue currently contested by NBFCs as per reports.

He highlighted broader expectations for legislative amendments to acknowledge and accommodate specific business practices in sectors like NBFCs, insurance (including reinsurance and co-insurance issues), and online gaming.

He argued that the current GST framework does not adequately recognize these diverse business practices nationwide.

He called for an umbrella provision empowering the government and tax authorities to respect and provide relief based on industry-specific practices. This, he suggested, could be a significant outcome expected from the upcoming GST Council meeting.

Source from: https://www.cnbctv18.com/economy/gst-council-meeting-june-2024-key-expectations-gst-tax-slabs-exemptions-fertiilsers-gaming-nbfcs-budget-2024-19430384.htm