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GST Council raises upper age limit of president and members of Appellate Tribunals

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Finance Minister Nirmala Sitharaman with Union MoS for Finance Pankaj Chaudhary, Revenue Secretary Sanjay Malhotra and others during the 52nd Goods and Services Tax (GST) Council Meeting, in New Delhi, on October 7, 2023.

Finance Minister Nirmala Sitharaman with Union MoS for Finance Pankaj Chaudhary, Revenue Secretary Sanjay Malhotra and others during the 52nd Goods and Services Tax (GST) Council Meeting, in New Delhi, on October 7, 2023.
| Photo Credit: PTI

The Goods and Services Tax (GST) Council has decided to raise the maximum age limit for the president and members of the GST Appellate Tribunals, Finance and Corporate Affairs Minister Nirmala Sitharaman announced after the 52nd Council meeting.

The president can have a tenure up to the age of 70, raised from 67 earlier, while the cap for members has been raised from 65 to 67. The minimum age of appointment, which was not specified earlier, is now recommended to be 50 years.

“We wanted it to be clear that advocates with up to ten years of experience must be minimum for consideration to become judicial members of the tribunals,” said Ms. Sitharaman.

The GST Council also decided that food preparations of millet flour in powder form, with at least 70% of the composition as millets in the blend, will have a 0% GST if sold loose or packed without any branding and labelling, and 5% only if sold pre-packaged and in a labelled form.

Taxing extra-neutral alcohol

Another critical decision taken that Ms. Sitharaman said would have major implications in Centre-State ties was that though the GST Council had, by law, the right to tax the extra-neutral alcohol (ENA), the Council has ceded that right to tax ENA to the States.

“It’s States’ decision now to tax it or not to,” she said. “This has been done in the interest of the States.”

The Allahabad High Court had earlier ruled that States had lost their competence to levy a tax on ENA.

The GST on molasses has been reduced from 28% to 5%, which the Minister said would benefit sugarcane farmers and will enable them to get paid faster from the sugar mills.

“We also believe that it will reduce the cost of cattle feed. The GST rate notification will be amended to create a new entry for extra-neutral alcohol for industrial use and that shall attract 18% tax,” she said.

On services, in order to promote tourism, the Council has given a conditional exemption to foreign-flag, foreign-going vessels, from the levy of Integrated GST, if they convert temporarily for a coastal run.

“In other words, for the next couple of months, in the winter, let’s say foreign run vessels do cruise tourism along India’s coast, we have decided to exempt them from 5% IGST normally levied. This will promote tourism particularly on the Western coast, from Mumbai to Kochi, and even the eastern coast,” said Ms. Sitharaman.

Revenue Secretary Sanjay Malhotra said that in the case of Indian Railways, the entire spectrum of Railways’ related services will now be on a forward charge and input credit mechanism. Until now, certain services provided by Railways and to Railways, were charged on a reverse charge mechanism.

On corporate guarantees, there were two decisions. When a director gives a guarantee to a company, and there is generally no consideration provided, the GST levy will be zero. When a corporate guarantee is provided to a subsidiary, the GST will be levied at 18% on 1% of the total guarantee provided.

Gaming industry

On online gaming companies’ tax liabilities, there was some discussion in the Council. It was clarified that this is not retrospective and this is how the law was, so these liabilities were already existing.

The Finance Minister says no call has been taken on the rate rationalisation exercise for GST yet, responding to a query on whether that could be expedited in view of higher GST revenues.

Revenue Secretary Malhotra said that 18 States have passed amendments to their GST laws to enable the 28% levy on online gaming, casinos and horse racing, while 13 States are yet to do so. However, he clarified that all States have agreed to pass the laws with effect from October 1.

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