GST 2.0 and rate rationalization
- 56th GST Council Meeting: A crucial meeting is set for September 3 and 4 in New Delhi, where the GST Council will consider the recommendations for structural changes and rate rationalization.
- Removal of 12% and 28% slabs: The Group of Ministers (GoM) has endorsed the plan to eliminate the 12% and 28% GST slabs for most items, moving them into a streamlined 5% or 18% structure.
- Revised rates for automobiles: Under the new proposal, the GST rate for small two-wheelers (under 350cc) and small cars is likely to be reduced to 18%, making them cheaper. However, larger two-wheelers (above 350cc) and luxury items could face a new 40% "sin tax".
- Cheaper essentials: Many everyday essentials, including packaged food and certain medical devices, are expected to become cheaper as the government pushes for lower rates.
Administrative and legal updates
- Adjudication orders remanded: The Calcutta High Court has remanded a GST appeal, citing that the assessee was unaware of the Show Cause Notice (SCN) uploaded to the portal.
- Appeal filing extension: The Madras High Court condoned a one-day delay in filing a GST appeal, deeming the reason to be genuine.
- Fresh adjudication ordered: The Delhi High Court mandated a fresh adjudication for a GST demand, which cited duplication in the original order.
- Online gaming clarification: Reports indicate that online gaming firms are facing tax demands from GST authorities. Meanwhile, the GST Council continues to confirm a flat 28% GST on the full face value for online gaming and casinos.
- Advisory on ITC for flavored milk: The Supreme Court dismissed the Union's appeal, confirming that flavored milk remains at a 5% GST rate.
- GST evasion uncovered: Government data revealed that GST authorities have detected over ₹104 crore in tax evasion from illicit tobacco products in the first quarter of the financial year.
Business and industry-specific news
- Apparel industry appeal: Apparel manufacturers have asked the government for a uniform 5% GST rate on all garments to combat issues like under-invoicing.
- Corporate tax notices: Zomato's parent company, Eternal, received a tax demand exceeding ₹40 crore from GST authorities.
- Market anticipation: Dealers in sectors like automobiles and electronics are reportedly limiting new inventory purchases in anticipation of GST rate cuts, which has led to market uncertainty.