GST Council Raises Upper Age Limit of President and Members of Appellate Tribunals
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The 52nd meeting of the Goods and Services Tax (GST) Council held in Delhi brought forth significant changes and decisions, impacting both the administration of the GST and the tax landscape concerning certain commodities.
Raising the Age Limits
One of the pivotal changes introduced in this meeting pertains to the age limits for the president and members of the GST Appellate Tribunals. Finance and Corporate Affairs Minister Nirmala Sitharaman announced that these changes would come into effect.
- The president of the GST Appellate Tribunals can now serve until the age of 70, an increase from the previous limit of 67.
- For members of the Tribunals, the age cap has been raised from 65 to 67.
- Additionally, a minimum age requirement has been established for appointment, which now stands at 50 years.
These measures aim to ensure that individuals with a minimum of ten years of advocacy experience are considered for judicial membership in the tribunals, enhancing the expertise and competence of the members.
Taxation of Millet Flour
The GST Council also made an important decision regarding food preparations made from millet flour in powder form. If these preparations consist of at least 70% millets in their composition and are sold without branding and labeling, they will be subject to a 0% GST rate. However, if they are pre-packaged and labeled, a 5% GST rate will apply.
Taxing Extra-Neutral Alcohol (ENA)
In a notable shift of power, the GST Council has relinquished its authority to tax extra-neutral alcohol (ENA) to the States. Finance Minister Sitharaman emphasized that it is now the prerogative of the States to decide whether to impose taxes on ENA or not. This decision follows a ruling by the Allahabad High Court, which asserted that States had lost their jurisdiction to levy a tax on ENA.
Regarding molasses, the GST rate has been reduced from 28% to 5%. This change is expected to benefit sugarcane farmers and expedite payments from sugar mills. Additionally, it is anticipated to reduce the cost of cattle feed. A new entry for extra-neutral alcohol for industrial use will attract an 18% tax rate.
In an effort to boost tourism, the GST Council has granted conditional exemption from the Integrated GST (IGST) to foreign-flag, foreign-going vessels temporarily converting for coastal runs. This move is expected to encourage tourism along the Western and Eastern coasts of India.
Changes in Taxation for Indian Railways
The Council has introduced changes in the taxation of services related to Indian Railways. These services will now be subject to a forward charge and input credit mechanism, departing from the previous reverse charge mechanism for certain services provided by Railways and to Railways.
Regarding corporate guarantees, two key decisions have been made:
- When a director provides a guarantee to a company without any consideration, there will be no GST levy.
- However, when a corporate guarantee is offered to a subsidiary, an 18% GST will be imposed on 1% of the total guarantee provided.
Online Gaming Tax Liabilities
The meeting addressed tax liabilities for online gaming companies. It was clarified that these liabilities are not retrospective; they align with existing tax laws.
The Finance Minister clarified that no decision has been made yet regarding rate rationalization for GST, despite the increase in GST revenues.
The 52nd GST Council meeting has introduced significant changes and reforms, ranging from age limits for tribunal members to taxation on various commodities. These decisions aim to streamline the GST system and ensure the smooth functioning of the taxation framework.
Source: The Hindu