Finance Minister Nirmala Sitharaman, in her reply to the discussion on the Finance Bill, said that 75 per cent of the GST collected goes to the states and opposition members should ask their state finance ministers to submit the proposal to the GST Council (representative image)
The GST Council on Monday is expected to deliberate on a range of issues, including taxation of insurance premiums, suggestions from the Mexican government on rationalisation of rates and a report on the status of online gaming, sources said.
Sources said the adjustment committee, comprising tax officials from the Centre and state, will submit a report on GST levied on life, health and reinsurance premiums and the revenue implications.
The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, will decide whether to reduce the tax burden on health insurance from the current 18 per cent or exempt certain categories of people, such as senior citizens.
The GST cut on life insurance premiums will also be discussed.
In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health insurance premium, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium.
The issue of taxation of insurance premiums figured in the Parliament debates, with opposition members demanding that health and life insurance premiums be exempted from GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue.
Finance Minister Nirmala Sitharaman, in her reply to the discussion on the Finance Bill, said that 75 per cent of the GST collected goes to the states and opposition members should ask their state finance ministers to submit the proposal to the GST Council.
West Bengal Finance Minister Chandrima Bhattacharya had raised the issue at the Group of Ministers (GoM) meeting on rate rationalisation last month and the matter was referred to the fine-tuning committee for further analysis of the data.
The Mexican government had spoken out against any modification to the four-tier GST slabs of 5, 12, 18 and 28 per cent for the time being. However, the panel had asked the adjustment committee to examine the possibilities of rationalising the rates on goods and services.
As far as online gaming is concerned, tax officials at the Centre and the State will submit a ‘status report’ to the GST Council. The report would include GST revenue collection from the online gaming sector before and after October 1, 2023.
Starting from October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28 percent GST. Before that, many online gaming companies did not pay the 28 percent GST, arguing that there were differential tax rates for games of skill and games of chance.
The GST Council in its August 2023 meeting had clarified that online gaming platforms were required to pay 28 per cent tax and subsequently, the central GST law was amended to clarify the tax provision.
Offshore gambling platforms were also required to register with GST authorities and pay taxes, failing which the government would block such sites.
The council then decided that the taxation of the online gaming sector would be reviewed after six months of its implementation.
The sources said the council would deliberate on the state of taxation in the sector and that changes to tax rates were unlikely.
The Council is also likely to be briefed about the ongoing drive against fake registrations, the success of the drive and the action taken against such entities. The total amount of alleged GST evasion would also be placed before the Council.
The campaign, from August 16, 2024 to October 15, 2024, aims to detect suspicious or fake GSTINs and perform necessary verification and other corrective actions to weed out such fake invoicers.
In the first drive conducted between May 16, 2023, and July 15, 2023, against fake registration, it was found that 21,791 entities (11,392 under the state tax jurisdiction and 10,399 under the CBIC jurisdiction) that had GST registration were non-existent.
During the special drive, an amount of Rs 24,010 crore (State: Rs 8,805 crore + Centre: Rs 15,205 crore) of alleged tax evasion was detected.
The Council would also approve the notifications, including the one on the amnesty scheme, announced in the last council meeting. The various amendments to the GST law decided by the council in its previous meeting on June 22 were approved by Parliament last month through the Finance Bill, 2024.
At the June meeting, the council adopted a number of taxpayer-friendly measures, including waiving interest and penalties on demand notices issued in the first three years of GST (2017-18, 2018-19 and 2019-20) if the full tax due is paid by March 31, 2025.
To reduce litigation, the Council has fixed a monetary limit for tax officials to file appeals before the GST Appellate Tribunal, High Court and Supreme Court at Rs 20 lakh, Rs 1 crore and Rs 2 crore respectively.
It also recommended a reduction in the amount of advance deposit to be paid by taxpayers for filing appeals under the Goods and Services Tax (GST).
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 8, 2024 | 10:29 am IS
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