GST Council To Decide On Decriminalisation Of GST Offences, Setting Up Appellate Tribunals

The GST Council, chaired by Finance Minister Nirmala Sitharaman, is likely to decide on a number of issues such as decriminalisation of GST offences and setting up of Goods and Services Tax Appellate Tribunals at its meeting on December 17.

According to sources, the law committee of the GST Council, comprising tax officers from the Centre and states, in a report has suggested increasing the monetary threshold for launching prosecution for GST offences.

The law committee has also suggested that the fee payable by taxpayer for compounding of GST offences be lowered with a view to improving ease of doing business.

Another important issue likely to be taken up by the Council relates to taxation of online gaming, casinos and horse racing.

The Group of Ministers (GoM) set up by the Council to decide on GST rates on online gaming, casinos and horse racing had completed its deliberations last month.

The GoM is understood to have recommended a GST levy of 28 per cent on online gaming, irrespective of whether it is a game of skill or chance. However, there was no consensus on whether the tax would be levied on only the fees charged by the portal or the entire consideration, including the bet amount received from participants.

Although the GoM is yet to submit its report to the Union Finance Minister, it is widely expected that the panel would be submitting it before the Council meeting on Saturday.

As regard decriminalisation of GST offences, the law committee has suggested raising the threshold of launching prosecution to Rs 20 crore, from Rs 5 crore at present. Launching of prosecution by taxmen means commencement of legal proceedings against the offender.

The Council, in its meeting to be held virtually on December 17, is also likely to consider removing those penal offences which are already covered under the Indian Penal Code (IPC) from the GST Act to make it more taxpayer friendly.

The committee has also suggested that the fee for compounding offences be reduced to 25 per cent of the tax amount, from 50-150 per cent currently.

Currently as per the GST Act, the amount payable for compounding of offences is  50 per cent of the tax amount involved subject to a minimum Rs 10,000. Maximum fees for compounding is 150 per cent of the tax involved.

Once the proposal of GST law decriminalisation is approved by the GST Council, amendments to the central GST Act is expected to be introduced in the ongoing winter session of Parliament.

Once approved by Parliament, states would be required to amend their state GST laws in their legislative assemblies.

With regard to setting up of Goods and Services Tax Appellate Tribunals (GSTATs), the GoM has suggested that the tribunals should consist of two judicial members, and one technical member each from the Centre and states, besides a retired Supreme Court judge as President, sources said.

The GoM on GSTATs was set up in July under the chairmanship of Haryana Deputy Chief Minister Dushyant Chautala.