GST Council to Meet Next Month: Cement Tax and Online Gaming on Agenda

The GST Council is expected to provide much-awaited clarity on tax rates for online gaming during their upcoming meeting, which is likely to take place next month. Along with this, the council will also be deciding on the revision of tax rates for millets and cement.

According to a finance ministry official, a council meeting in June is expected as the state elections will be over by then.

The Group of Ministers' report on online gaming, horse racing, and casinos will be presented during the next meeting and hopefully, be approved. The report was not taken up at the 49th council meeting in February as the chair of the GoM, Meghalaya Chief Minister Conrad Sangma, could not attend due to state elections. There is currently no consensus on whether online games should be considered games of skill or chance and how they should be taxed.

The amended Finance Act of 2023 and IT Intermediary Amendment Rules have given the online gaming industry confidence that the government will stick with an 18% GST, as opposed to 28% on gross gaming revenue.

This change is crucial as applying a higher GST on GGR could result in a significant rise in tax, with an impact as high as 1100% on businesses and 300% on gamers. Additionally, income tax on gamers has been separately notified in the Finance Act 2023, with a TDS of 30% to be deducted from "net winnings" in the user account at the end of the financial year.

The council is also expected to revise tax rates on millets and cement. As the UN has declared 2023 as the International Year of Millets, the council is likely to reduce the tax rate to nil from 18% for millet-based products sold in loose form and 5% in pre-packaged and labeled form, provided millet makes up at least 70% of the ingredient in the products. The council may also discuss reducing the 28% GST rate on cement, as demanded by the industry.

It is important to note that the high GST rate on cement concerns individuals building homes, as they do not receive any input tax credit for GST on cement.

Developers only receive credit for taxes paid on raw materials for under-construction properties, which helps to make taxation optimum on the sale of flats. A rate cut on cement will benefit individuals and properties that have been constructed. GST collections peaked at Rs 1.87 lakh crore in April, with total collections in the last fiscal year amounting to Rs 18.10 lakh crore.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates