Briefing reporters about deliberations at the two-day meeting of the GST Council in Chandigarh, the finance minister spoke about rate rationalisation, the GST compensation to states, on corrections of invested duties, virtual digital assets and more.

On exemption, inverted duty structure

The GST Council has accepted the report submitted by the Group of Minister (GoM), headed by Karnataka Chief Minister Basavaraj Bommai, on tax exemptions and correction of inversion.

The Council's decisions on exemptions and correction of inversion will come into effect on 18 July, Revenue Secery has said.

On GST compensation to states

The GST Council didn't take any decision on extending beyond this month the compensation paid to states for revenue lost from the implementation of GST.

Puducherry finance minister K Lakshminarayanan said all states sought an extension of the compensation mechanism, but no decision has been taken.

Of the 16 states, 3-4 spoke of evolving their own revenue stream to break from the compensation mechanism, Sitharaman said.

The Centre did not reveal its mind on the issue.

A final decision is likely to be taken at the next meeting of the council in August.

On rate rationalisation

The FM said that the issue of rate rationalisation was not taken up during the meeting. "The rate rationalisation aspect of the GoM, headed by Karnataka Chief Minister Basavaraj S Bommai, has not been taken up," the Finance Minister said.

Tax on casinos, lottery

The GST Council has asked the Group of Ministers to re-deliberate on levying a 28% tax on casinos, online gaming, horse racing and lottery pending more consultations with stakeholders.

A group of ministers headed by Meghalaya Chief Minister Conrad Sangma has been asked to consider submissions of stakeholders again on the valuation mechanism and submit its report by 15 July.

The GoM had recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game.

In cases of race courses, it had suggested that GST be levied on the full value of bets pooled in the totalisators and placed with the bookmakers.

It also recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST and should be taxed at the highest rate of 28%.

The council will meet again in the first week of August to decide on the issue, Sitharaman said.