GST Council to Discuss Key Amendment; Retro Tax Relief Likely for Online Gaming Companies
đź“… By Admin | September 07, 2024
đź“‚ Categories: #GST #RecentNews
⏳ 4 Min Read
The GST Council will meet on September 9, 2024, to review an amendment to the GST Act 2017. This change aims to shield businesses from retrospective tax demands and could provide relief to sectors like real-money gaming (RMG), which currently face pending GST dues, according to an official statement.
This meeting builds on the Council’s June session, where Section 11A was proposed to ease the financial burden on industries with outstanding GST dues.
Amendment to GST Act: Section 11A
The Section 11A amendment aims to protect businesses from punitive retrospective tax demands. While the amendment has passed, the Council still needs to release a circular to clarify its scope. The Council is expected to address this circular in the upcoming meeting.
An official source noted, “The circular will outline how to apply and interpret the law, pending Council approval.” This clarification is vital for reducing legal disputes related to GST liabilities.
Experts believe the GST Council will use its powers under Section 11A to tackle these issues and, consequently, reduce litigation.
Implications for the Real-Money Gaming (RMG) Industry
The RMG sector could benefit greatly from this amendment. The industry has faced significant retrospective GST demands for the period from July 1, 2017 (when GST started) to March 31, 2023.
In December 2023, the *Finance Ministry reported that 71 show cause notices had been issued to online gaming companies for alleged GST evasion, totaling over Rs 1.12 lakh crore.
Additionally, businesses providing corporate guarantees and those in sectors such as *IT, airlines, and employee secondments are also seeking clarity on their past tax liabilities.
Key Legal Developments and Potential Impact
Section 11A is a significant development within the GST framework. This amendment offers crucial protection against punitive retrospective tax demands, which have caused financial distress for many industries.
Experts assert, “Section 11A provides much-needed relief and could resolve disputes related to corporate guarantees, employee secondments, and reimbursements to IT and airline companies.”
Once implemented, the amendment could reduce litigation and ease the burden of GST dues. It aims to enhance ease of doing business and regularize past trade practices. This step is expected to settle long-pending tax disputes across various sectors.
Overall, the GST Council’s decision could deliver long-awaited relief to the online gaming industry and others facing retrospective GST demands, fostering a more business-friendly environment.
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