GST Council could not mull over taxation on tobacco and gutkha due to paucity of time, said Finance Minister Nirmala Sitharaman.
"While a group of GST Council ministers submitted their report on the tax regime for casinos, online games, and horse racing to the Finance Minister a few days ago, it was not distributed or included in the agenda as there was insufficient time for members to study its recommendations," said Revenue Secretary Sanjay Malhotra. Also, this report will most likely be discussed in the upcoming GST Council meeting.
"Among the significant decisions the GST Council made today was one ground-breaking recommendation regarding the decriminalization of three categories of GST law offences: obstructing or impeding officers from performing their duties, willful tampering with evidence, and failure to provide information. In addition, for all offences other than those involving phoney invoices, the threshold limitations of tax amounts for initiating prosecution under any criminal crime defined under the GST regulations has been raised from 1 crore to 2 crore.
In a similar vein, the compounding amount under some offences has been decreased from 50% to 200% of the amount to 25% to 100% of the amount in order to lessen the workload of courts. Malhotra said.
While the central government will incorporate these decriminalization reforms in the Finance Bill for 2023–2024, the states will also need to appropriately revise their laws to implement the changes, he continued, noting that this will take time.
A vital component of bovine feed, the GST on husk from pulses like chilka and concentrates like chuni/churi, khanda, would be cut from 5% to zero. The 5% tax on ethanol that oil marketing companies pay when they mix it with gasoline will now also apply to refineries instead of the current 18% rate. The Revenue Secretary stated that this would further lessen our reliance on imported crude and conserve valuable foreign currency.
The Council has resolved to make it clear that Fryums produced using the extrusion technique are explicitly covered by an 18% GST rate in order to clear up any misunderstanding regarding the GST rate to be applied to Fryums. The Council also concluded that the Central Government's incentive payments to banks as part of the programme to promote RuPay Debit Cards and low-value BHIM-UPI transactions are in the nature of subsidies and are not taxable as such. A proposed system that received the Council's in-principle approval in June to allow unregistered suppliers and composition tax payers to provide items within the State through e-commerce operators will now begin on October 1, 2023. On Saturday, the Council approved changes to the GST Act and Rules that will make this system possible. They also gave e-commerce companies time to build the necessary functionality into their portals.
Ms. Sitharaman stated that the Group of Ministers of the GST Council, chaired by Karnataka Chief Minister Basavaraj Bommai on rationalising the GST Rate structure, has yet to submit its report regarding the more extensive ongoing overhaul of the GST rates structure and the rationalisation of inverted duty structures. She said, "I can't say anything right now because the GoMs' report on rate rationalisation is still forthcoming. Prior to the Council's most recent meeting in Chandigarh in June, the GoM had provided an interim report, on the basis of which some rate changes were made for things like pre-packaged, unbranded food items and milk products.
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