Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs (CBIC), in an earlier interview with Moneycontrol has indicated that any potential changes to GST rates will require careful consideration and may need to be implemented gradually. He emphasised the importance of revenue efficiency and suggested that rate rationalisation should be approached cautiously to ensure the stability of consolidated revenues, according to the report.

50th GST Council Meeting on July 11: What's on agenda?

1.Taxation on online gaming: The report of the panel of eight state finance ministers, convened by Meghalaya Chief Minister Conrad Sangma, on taxation of online gaming, horse racing and casinos is slated to be discussed in the meeting.

The GoM (group of ministers) had a broad agreement that a 28 per cent GST should be levied on all the three supplies, but a consensus eluded on the taxability of online games with Goa suggesting that an 18 per cent tax should be levied only on platform fees and contribution to prize pool should be tax exempt.

GoM has left the decision to the Council on whether GST should be imposed at a rate of 28 per cent on the full face value of bets by players of online gaming, horse racing, casinos or on the gross gaming revenue.

2. Tax on non-fried snacks: Another important matter on the agenda is the tax treatment of non-fried snacks such as papads and kachris. Currently taxed at 18 per cent, there is a proposal to either grant them full exemption from GST or impose a reduced rate of five per cent.

3. Tax rate on food, beverages at multiplexes: The GST Council may provide clarity on the tax rate applicable to food and beverages served at cinema halls There is a need to determine whether it should be taxed at 5 per cent or 18 per cent, as some multiplexes have been following different practices. 

If the sale of cinema ticket and supply of eatables such as popcorn or cold drinks etc. are clubbed and sold together, the entire supply should be treated as composite supply and taxed as per the applicable rate of the principal supply, which in this case is cinema ticket. Currently, movie tickets below ₹100 are taxed at 12 per cent, while those above the threshold attract an 18 per cent GST.

4. ITC claims: A new rule in GST law under which businesses would be required to explain the reasons for excess ITC claimed or deposit the amount with the exchequer is likely to be discussed. 

The Law Committee, comprising tax officers from Centre and states, have opined that where the ITC availed in GSTR-3B return exceeds the amount of ITC available in accordance with the auto-generated statement GSTR-2B by a specified threshold, the registered person may be intimated on the portal about such difference and be directed to either explain the difference or pay the excess ITC along with interest.

The Committee has suggested that the provision should kick in if the difference is more than 20 per cent and more than ₹25 lakh. GST Council is likely to take a final call on the recommendation of the Committee.

5.Taxation on MUVs: A clarity on taxation of Multi Utility Vehicles (MUV) or multipurpose vehicles or Crossover Utility Vehicles (XUVs) for levy of a 22 per cent compensation cess over and above the 28 per cent GST rate is also expected.

The fitment committee, comprising Centre and state tax officers, has recommended that all utility vehicles, by whatever name called, would attract a 22 per cent cess provided they meet three parameters — length greater than four-metre, engine capacity greater than 1,500 cc and ground clearance in 'un-laden condition' of more than 170 mm.

6.Rate rationalisation: Another important discussion that is likely to take place in the GST Council meeting is the reconstitution of the group of ministers (GoM) on rate rationalisation. The position of the convenor of the said GoM has been lying vacant after the government change in Karnataka. Earlier, former Chief Minister Basavraj Bommai, was the convenor of the seven-member GoM.

Among other key items on agenda, the GST Council is expected to finalise contours for setting up appellate tribunal, and demand of the industry for reimbursement of full CGST and 50 per cent IGST in 11 hill states under the 'scheme for budgetary support'.

The meeting may also address the issue of GST exemption on the import of certain cancer drugs, specifically Dinutuximab. The GST fitment committee has recommended exempting this medicine, which costs ₹36 lakh, as patients and families often rely on external funding to purchase it.

The GST Council is also likely to decide on TCS liability of suppliers engaged in e-commerce trading through government's Open Network for Digital Commerce (ONDC). Satellite launch services by private players are likely to be exempt from GST.