GST Council Recommendations Include Setting 28% GST on Online Gaming, Exemption for Start-ups in Space Sector
On 11 July 2023, the Goods and Services Tax Council (GST Council), in its 50th meeting, made certain recommendations relating to changes in GST tax rates, measures for facilitation of trade and measures for streamlining GST compliance. These recommendations will be implemented through circulars/notifications amending the law.
The recommendations are set out below.
- Online gaming and horse racing will be included in schedule III as taxable actionable claims and will be taxed at the uniform rate of 28%. Tax will be imposed on the face value of chips purchased in casinos, on the full value of bets placed with bookmakers/totalizators in the case of horse racing and on the full value of bets placed at online gaming.
- The GST rate is reduced from 18% to 5% for specified products like uncooked/unfried snack pellets, imitation zari thread or yarn, fish soluble paste and Linz-Donawitz (LD) slag.
- Specific medicines imported for personal use as well as medicines/food items imported for treatment of rare diseases will be exempt from GST.
- GST exemption for satellite launch services supplied by the Indian Space Research Organization (ISRO), Antrix Corporation Limited and New Space India Limited (NSIL) will be extended to include services supplied by organizations in the private sector to encourage start-ups.
- Services supplied by a director of a company to the company in his personal capacity, such as supplying services by way of renting of immovable property to the company or body corporate, are not taxable under the reverse charge mechanism (RCM). Only those services supplied by a director as, or in the capacity of, director of that company or body corporate will be taxable under the RCM in the hands of the company or body corporate.
- The goods transport agency (GTA), paying GST under forward charge, will not be required to furnish a declaration every year. A declaration once furnished will remain valid until it is cancelled.
- The value of supplies of goods from duty free shops at arrival terminals in international airports must be included in the value of exempt supplies for the purpose of the reversal of input tax credit.
- Relevant circulars will be issued to provide clarity on issues such as (i) liability for tax collection at source (TCS) in cases where multiple e-commerce operators (ECOs) are involved in a single transaction for the supply of goods or services or both; and (ii) merely holding securities of a subsidiary company by a holding company cannot be treated as a supply of services and taxed under GST.
- E-way bill generation will be mandatory for intra-state movement of gold and precious stones.
- Rules on GST registration will be amended to provide that:
- bank account details are furnished within 30 days of the grant of registration or before filing of Form GSTR-1/ IFF, whichever is earlier;
- suspension of GST registration and restriction on filing GST returns on failure to furnish valid bank account details; and
- physical verification of business premises in the presence of the applicant may not be required except in high risk cases.
- Exemption from filing the GSTR-9/9A for small taxpayers (with an aggregate annual turnover up to INR 20 million) continues for FY 2022-23.