According to a news briefing by the Finance Ministry, the 50th GST Council meeting, which took place on July 11, 2023, made a number of suggestions on modifications to GST tax rates.

“We have offered exemption on GST for satellite launch services provided by private organisations. Online gaming, horse racing and casinos will be taxed at 28% (all three activities) and they will be taxed on full face value,” said Union Finance Minister Nirmala Sitharaman.

The panel, which was led by the Union Finance Minister and included members from all the states and UTs, also modified the definition of an SUV to incur a cess over and above the GST rate and cut the service tax payable on food and beverages eaten in movie theatres to 5%.

Currently, an SUV must meet four criteria in order to be subject to the imposition of a cess: it must be commonly referred to as an SUV, be at least 4 metres long, have an engine with a displacement of 1,500 cc or more, and have a minimum 170 mm of unloaded ground clearance.

According to her, the SUV will henceforth only be defined by its length (4 metres and up), engine size (1,500 cc and up), and ground clearance (170 mm and above).

The GST Council agreed to impose 5% GST, which is similar to the tax on restaurants, rather than the 18% that is now levied on food and beverages supplied at movie theatres.

The lowering of the rate on uncooked/unfried snack pellets, by whatever name called, to 5% is one of the most significant adjustments. For companies in the food processing industry, this is a step that will lower costs and increase the competitiveness of their offerings.

“GST rates on uncooked/unfried extruded snack pellets brought down from 18% to 5%; on fish soluble paste, rates have been bright down to 5% from 18 percent; rates on imitation zari threads brought down to 5% from 12%,” added Sitharaman.

The GST Council also recommended several other changes to the GST tax rates, such as: exempting IGST on Dinutuximab (Quarziba) medication when imported for personal use; exempting IGST on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases; clarifying that the supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under the reverse charge mechanism; and decreasing GS.

Additionally, suggestions were made in favour of regularising the issues relating to desiccated coconut for the time period of July 1, 2017, through July 27, 2017, notifying an earlier ad rate for pan masala, tobacco products, etc., where it is not legally necessary to declare the retail sale price, adding RBL Bank and ICBC Bank to the list of specified banks for which IGST exemption is available on imports of gold, silver, or platinum, and regularising the issues relating to GST.

The suggestions made by the GST Council are a good start towards streamlining and improving the GST tax system. Both businesses and consumers will gain from them. In the upcoming days, the council is anticipated to publish a notification outlining the adjustments.

Also Read - Make in India: Nestlé intends to construct a plant in Odisha and invest $900 million in the country.