GST in India: Recent Updates and Changes
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It was introduced on 1st July 2017, replacing multiple taxes such as excise, VAT, service tax, etc. The GST rates are decided by the GST Council, which comprises the Union Finance Minister and the State Finance Ministers. The GST rates vary from 0% to 28%, depending on the category of goods and services. There are also some special rates such as 3% for gold and 0.25% for rough diamonds. In addition, some items such as petrol, diesel, alcohol, and tobacco are subject to cess over and above the GST rates.
Since its implementation, the GST regime has undergone several changes and revisions to address the issues and challenges faced by the taxpayers and the government. Some of the recent updates and changes in GST are as follows:
- Amnesty schemes for late filers and defaulters: The GST Council, in its 51st meeting held on 2nd August 2023, approved various amnesty schemes for late filers of GSTR-4, GSTR-9, GSTR-10, defaulters attracting Section 62 of the CGST Act (Best Judgement assessment) and for applying revocation of cancelled GST registration in REG-21. These schemes provide relief in terms of waiver or reduction of late fees, interest, and penalty for the eligible taxpayers, subject to certain conditions and time limits1.
- E-invoicing for taxpayers with turnover above Rs.5 crore: The GST Council, in its 50th meeting held on 11th July 2023, decided to extend the e-invoicing system to taxpayers with annual turnover equal to or more than Rs.5 crore in any financial year from 2017-18 onwards. The e-invoicing system requires taxpayers to report their tax invoices and credit-debit notes to the Invoice Registration Portal (IRP) and obtain a unique Invoice Reference Number (IRN) and a QR code for each invoice. The e-invoicing system aims to improve compliance, reduce fraud, and facilitate seamless data exchange between the GST portal and the e-way bill portal2.
- GST on online gaming at 28%: The GST Council, in its 50th meeting, also fixed the GST rate on online gaming at 28% on the full face value of the bets or stakes placed by the players. This decision was taken to bring parity with the GST rate on casinos and race courses, which are also taxed at 28%. The GST Council also clarified that the GST on online gaming would be applicable irrespective of whether the games are skill-based or chance-based3.
- Global Stocktake (GST) draft at COP28: The GST is a periodic review of the collective progress of the parties to the Paris Agreement on climate change. The first GST is scheduled to take place in 2023. The GST draft is a document that outlines the options and modalities for conducting the GST. The GST draft was released at the ongoing Conference of Parties (COP28) in Dubai, UAE, on 11th December 2023. However, the GST draft faced criticism from the developing and poor countries, who expressed their disappointment over the exclusion of phasing out of fossil fuels, the lack of differentiation between the responsibilities of developed and developing countries, and the insufficient provision of finance and technology transfer45.
These are some of the latest developments and changes in GST in India and globally. The GST regime is expected to evolve further in the coming days, as the GST Council and the government respond to the feedback and suggestions from the stakeholders and the public.