GST meeting: Group of Ministers agree on maintaining current tax slab but no word on online gaming
August 22, 2024
Chaudhary added that the GoM has received feedback from sectors such as restaurants, beverages, and online gaming, which will be reviewed and possibly referred to the Fitment Committee.
The Group of Ministers (GoM) on GST rate rationalisation met on Thursday and largely agreed to maintain the current four-tier tax slab system. The panel has asked tax officers to analyse the impact of adjusting rates on certain items and present their findings to the GST Council.
The GoM also discussed the GST rates on health and life insurance, with some states raising concerns. This issue has been referred to the Fitment Committee, which is comprised of central and state tax officials, for further examination.
The GoM’s recommendations will be reviewed at the next GST Council meeting scheduled for September 9, which will be chaired by Union Finance Minister Nirmala Sitharaman and include state finance ministers.
It is not likely that the Council may take up the issue of contentious 28% GST levy on online gaming industry, which was supposed to be reviewed six-months post its enforcement from October 2023. An official had told Finance Express earlier that the review was unlikely as revenue collections due to the 28% levy (on full face value of bets) has risen four-fold.
Bihar Deputy Chief Minister Samrat Chaudhary, who convened the GoM, said that some members are advocating for no changes to the current tax slabs. He noted that further discussions are needed before any final decision is made.
Chaudhary added that the GoM has received feedback from sectors such as restaurants, beverages, and online gaming, which will be reviewed and possibly referred to the Fitment Committee.
West Bengal Finance Minister Chandrima Bhattacharya also expressed support for retaining the existing GST slabs. She mentioned that a presentation on this issue would be made before the GST Council, and the next GoM meeting would follow the Council’s session on September 9.
Karnataka Revenue Minister Krishna Byre Gowda commented that the GST system has generally stabilised and questioned the benefits of altering it at this time. He indicated that discussions on reducing the number of tax slabs from four to three will be considered in future meetings.
Regarding GST on health and life insurance, which is currently taxed at 18%, Byre Gowda stated that the GoM has requested additional information from the Fitment Committee. There is ongoing debate over whether these premiums should be exempt from GST.
The GST Council had previously tasked the GoM with reviewing the GST rate structure, correcting the inverted duty structure, and proposing rate adjustments to simplify the tax system and enhance revenue.
The GoM, originally established in September 2021 under former Karnataka Chief Minister Basavaraj Bommai, submitted an interim report in June 2022. The Council will review these findings and decide on the next steps in its upcoming meeting.
Currently, India’s GST system features five broad tax slabs: zero, 5%, 12%, 18%, and 28%. A cess is applied to luxury and demerit goods above the highest slab.
[The Financial Express]
