No GST reduction until a new government is formed

The model code of conduct will take effect with the announcement of the election, therefore the delay in the GST Council meeting would not provide immediate relief to those companies waiting on government answers.

At its 51st meeting, the Council said that it will review the 28% tax on internet gambling and casinos six months after it went into effect on October 1, 2023.

The interim budget and the approaching general elections forced the Council to miss its scheduled quarterly meeting. “The GST Council meeting is probably going to happen after the formation of the new administration. The model code of conduct prevents any significant decisions from being made, a senior source informed this publication. The 52nd meeting of the GST Council was held on October 07, 2023.

Fast-moving consumer goods (FMCG) firms are under increased scrutiny from the Directorate General of GST Intelligence (DGGI) due to suspected tax fraud.

Industry insiders claim that since there is so much uncertainty around the tax rate, the FMCG sector requires the Council to provide explanation. In a similar vein, the real estate sector is likewise waiting for clarity about the 18% GST imposed on projects using special purpose vehicles (SPVs). It must also make clear where it stands on issues like rate rationalization, the GST on corporate guarantees, and the continuation of anti-profiteering laws.

The GST Council makes decisions on all significant GST-related issues. Chetan Daga, a chartered accountant and the founder of AdvantEdge Consulting, said that it is only reasonable that policy decisions about GST problems be postponed until after the model code of conduct for general elections is issued, which is anticipated to happen shortly.