GST decisions

THE Goods and Services Tax (GST) Council’s 50th meeting has, to a certain degree, brought relief to the general populace. Exemption from GST has been given on medicines for rare health ailments, certain food items for medical purposes and specific cancer drugs. Food and beverages served in cinema halls are set to get cheaper. These will attract a GST of 5 per cent, equivalent to the levy charged in hotels and restaurants, instead of 18 per cent. It’s the decision to impose 28 per cent GST — the highest of the four slabs — on online gaming companies’ collections from customers that has drawn sharp reactions. The $1.5-billion industry sees it as a major setback. The high tax burden, the contention is, would severely impact overall operations, foreign investment and jobs, benefiting illegal offshore companies in the long run. There is a clamour for a rethink.

All utility vehicles will attract GST of 28 per cent and a compensation cess of 22 per cent. The decision to bring the cess on MUVs and SUVs on a par will lend certainty to the tax treatment of these vehicles. On the downside, costs could rise for people planning to buy vehicles and for consumers using taxi services. The tax exemption for satellite launch services supplied by private organisations is expected to encourage entrepreneurship.

The inclusion of the GST Network, the platform that processes tax returns, under the purview of the Prevention of Money Laundering Act without any formal discussion has drawn the Opposition’s ire. Ruling out misuse of probe agencies, the Centre says information will be shared with the Financial Intelligence Unit and not the Enforcement Directorate. The move, it claims, is in line with the requirement specified by the Financial Action Task Force. This may not be enough to allay concerns.