53rd GST Council Meeting: Clarification expected on Key issues Sunset Clause, Monetary Limits and Various Sector
The GST Council is ready for its upcoming meeting on June 22, 2024, which will be held in New Delhi. The Council is likely to talk about various major agendas that could impact significantly the regulatory framework for businesses and taxpayers as well.
As per the sources, the GST Council can introduce a clause namely ‘sunset clause’ for anti-profiteering cases with a date of termination of 1st April 2025.
Apparently, the Competition Commission of India (CCI) is currently struggling with handling these cases because of a lack of experience and this proposed move may seen as a step towards speeding the adjudication process.
Thus, it can be expected that anti-profiteering cases may be delegated to the Principal Bench of the GST Appellate Tribunal (GSTAT) for settlement.
The Cases taken up by the big judgment authorities like the GST Appellate Tribunal (GSTAT), High Courts and the Supreme Court, the GST council is likely to set some monetary limits on these cases, according to sources.
The Law Committee’s proposal may be approved by the GST Council to set monetary limits for cases to be handled by the following-
GSTAT – Rs.20 lakh to handle the case.
High Courts – Rs.1 crore to handle the case.
Supreme Court – Rs.2 for handling the case.
Furthermore, to track the latest status of the cases, the council can prepare a database.
Launching of a New form GSTR-1A, is also into consideration. This new form means to revise GSTR-1. It is expected that GSTR-1A will help the taxpayer to make changes like amending or adding the data in return within the same month or period after Filing GSTR-1 and before GSTR-3B Filing.
Reduction in Tax Collected at Source (TCS) rate from 1% to 0.5% for E-Commerce Suppliers who made outward supplies is also considered by the GST Council.
In addition, the council is expected to issue some clarification on the taxation of corporate guarantees between the parties that are related and define the eight particular scenarios to provide clarity case by case.
Clarification on tax implications of securities or shares’ reimbursement and securities or shares including ESOPs, ESPPs, and RSUs (which are provided by a company to its employees), can also be taken into consideration by the GST Council.
When the foreign holding company issues ESPPs, ESOPs and RSUs to the domestic subsidiary company’s employees, no service appears to have taken place between a foreign holding company and its domestic subsidiary company, the Law Committee proposed this.
Therefore, the cost of these securities or shares is reimbursed to the foreign holding company by the domestic subsidiary company on a cost-to-cost basis.
In motor insurance claims, the applicability of GST on the wreck and salvage values is likely to get clarification in the GST Council Meeting. When insurance companies deduct the salvage value from the amount claimed as a mandatory deduction as mentioned in the contract, the insurance companies will be not liable to pay GST. But, if the insurance claim gets settled for the full claim amount without the deduction of wreck or salvage value, in this case, GST is required to be paid by the insurance company. The council will clarify this GST treatment for the insurance policies and their claims.
In this upcoming GST council meeting, the council will possibly rationalize the pre-deposit amount for filing an appeal with the appellate authority. Council likely to propose pre-deposit at 10% of disputed tax or a maximum of Rs.20 cr each in CGST and SGST and Rs.40 cr for IGST, for filing an appeal with appellate authority.
