FM Nirmala Sitharaman to Chair 53rd GST Council Meeting in New Delhi

A day after taking charge as Union Finance Minister, Nirmala Sitharaman is poised to preside over the highly anticipated 53rd GST Council meeting. The session is set to address several critical issues affecting various sectors of the economy, promising significant deliberations and potential resolutions.

Pre-Meeting Preparations: Fitment Committee's Role

In the lead-up to the meeting, the council-nominated Fitment Committee is expected to convene and scrutinize several proposals for detailed deliberation. Key considerations on the committee's agenda include:

• Bringing Aviation Turbine Fuel (ATF) and Natural Gas under GST: The Petroleum Ministry has proposed a 5% GST on ATF and 12-18% on natural gas.
• Input Tax Credit (ITC) Clarifications: The committee will likely seek to resolve long-standing issues regarding ITC claims across various sectors.
• Tax on Metal and Steel Scrap: Proposals for clarifying the tax applicability on metal and steel scrap, awaited by the industry for over a year, will be discussed.
• Inverted Duty Structure Correction: A proposal from the Department for Promotion of Industry and Internal Trade (DPIIT) aims to correct the inverted duty structure on items such as textiles, leather, and pharmaceuticals.

Key Deliberations for the GST Council

After a nine-month hiatus, the GST Council has a comprehensive agenda, with many pending items for discussion:

• Rate Rationalisation: The council is expected to revise the existing Group of Ministers (GoM) on Rate Rationalisation, led by UP Finance Minister Suresh Khanna, and set a new timeline for a detailed report.
• GST on Online Gaming: Despite industry pushback, the council is likely to maintain the 28% GST on actionable claims in online gaming.
• Input Tax Credit on Telecom Services: Clarifications on ITC applicability for telecom services and spectrum charges are anticipated.
• Ease of Doing Business: The council aims to introduce measures to enhance compliance and streamline business operations.
• Biometric Authentication Rollout: A timeline for mandatory Aadhaar-based biometric authentication of GST taxpayers is expected to be approved.
• GST Exemptions for Foreign Airlines and Shipping Lines: Proposals to exempt services rendered between head offices and local branches of foreign operators from GST are under consideration.

Industry and Expert Expectations

Industry experts and stakeholders are keenly awaiting the outcomes of the 53rd GST Council meeting, expecting significant resolutions and clarifications:

• Rate Rationalisation and Petroleum Products: Experts anticipate discussions on including low-impact petroleum products like natural gas within the GST framework, which could benefit businesses.
• Industry-Specific Issues: Clarifications on transactions between related parties, ESOP taxation, and ISD regulations are expected.
• Dispute Resolution and Compliance: There is optimism for an amnesty scheme to resolve initial years' disputes and a review of pre-deposit percentages, aligning them with the service tax regime.

Overall, the 53rd GST Council meeting is set to be a crucial platform for addressing various pressing issues and enhancing the GST framework, marking a significant step in streamlining tax policies and compliance in India.