Today’s GST Council Meeting: Five Important Things to Keep Updated!
After more than eight months, the Goods and Services Tax (GST) Council is gathering in the nation’s capital to examine issues related to indirect taxes, such as fortifying the tax system to make it impenetrable.
During its meetings, the indirect tax body examines patterns in tax revenue collection, considers suggestions for legislation and tax rate modifications from panels of federal and state authorities, and approves critical actions performed by officials since its last meeting. Mint examines the items on the meeting agenda for today.
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Law change on scope of GST
The key component in spirits, extra-neutral alcohol (ENA), is projected to be kept outside the purview of the GST and instead fall under the purview of state-level excise duty and value-added tax (VAT) if the Council approves the language of legislative adjustments to the Central, State, and Integrated GST laws. Since liquor is not subject to GST and is protected by state excise and VAT legislation, its taxation has been a topic of controversy. This highly refined type of alcohol, made from fermented molasses or grain, is not suitable for direct consumption. The Council’s ruling will provide the sector with certainty and lessen litigation.
| Topic | Summary |
|---|---|
| Duty relief | Proposal to amend GST laws for closing cases without further demand or refund, easing disputes, particularly in alcoholic spirits sector. |
| Ease of doing business | Possible reduction in GST Appellate Tribunal deposits, clarity on corporate guarantees taxation, and legislative changes on service supply timing. |
| Tightening GST registration system | Data matching to curb tax evasion, strengthen verification, and enhance GST registration process using technology and data analytics. |
| Future direction of GST | Considerations on tax rate rationalisation, correction of inverted duty structure, and decision on GST compensation cess post-March 2026. |
In certain industries, such as textiles, where the final product’s tax rate is lower than the inputs’, the duty anomaly serves as a deterrent for future investment. The delicate character of the mass-use products makes it difficult for the Council to reach a judgement, even though sound economics would dictate a correction.
The second is a determination regarding the compensating cess that is imposed on goods such as automobiles and carbonated beverages. Whether tax rates on these items need to be changed once the cess expires in March 2026 or before is a decision that the Council must make. It’s possible that decision-makers will deliberate over these matters more.
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