Bhoomika Singh
In the 50th Goods and Services Tax (GST) Council Meeting held on July 11, 2023, Finance Minister, Nirmala Sitharaman announced big decisions on the gaming industry, pharmaceuticals and food and beverages served in cinema halls. When there’s a relief to some, a big shocker to others, in the outcomes of the meeting. In addition, there were announcements related to the automobile industry as well.
The GST Council brought a big relief for cancer patients as the GST on cancer treatment and other special drugs, and food for medical purposes has been exempted. Furthermore, FM told that the government has extended exemption on GST for satellite launch services provided by private organisations too.
However, on the other side, FM Sitharaman announced that the GST Council has decided to impose a 28 per cent tax on the turnover of online gaming, horse racing and casinos at full face value.
“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 per cent (all three activities) and they will be taxed on full face value,” she said.
She further said that the tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance and will be levied on the entire value.
Additionally, the minister also said that the GST rates on uncooked or unfried extruded snack pallets brought down from 18 per cent to 5 per cent; on fish soluble paste, rates have been bright down to 5 per cent from 18 per cent; rates on imitation zari threads brought down to 5 per cent from 12 per cent.
The Council also decided that GST on food and beverages served in cinema halls would be levied at a reduced rate of 5 per cent, down from 18 per cent levied earlier, she added.
Moreover, the Council has decided that the only criteria for defining an SUV are its length (4 meters or more), engine size (1,500 cc or more), and ground clearance (170 mm or more when the vehicle is not loaded).
In conformity, the automobile industry feels that this is a great move as there were speculations about the Council might increase the GST on SUVs. Reacting to this decision, the Executive Partner at Lakshmikumaran & Sridharan, R. Raghavan said, “Considering the myriad interpretations adopted by industry and Department alike on the rate of compensation cess applicable to SUVs, the GST council in their 50th meeting has put matters to rest (at least for time being) by recommending an amendment to the rate entry.”
“The proposed amendment ensures that the rate entry is more precise in its intention and leaves little room for interpretation on the ambit of ground clearance which will have to be computed in an unladen state once the amendment is brought into force. Retrospective applicability of the amendment has to be tested in due course,” he added.
