GST Council Returns After a Year; Focus on Key Issues in September 12 Meeting

The GST Council is set to meet on September 12. Find out which key issues—such as ITC, GST rules, tax rates, and matters concerning businesses—might be discussed.

GST Council Meeting: After a gap of nearly a year, the GST Council will meet in New Delhi on September 12. Union Finance Minister Nirmala Sitharaman will chair the meeting. A meeting of officials will take place a day prior, on September 11. According to the official memorandum, preparations will be made to discuss several crucial GST-related issues during this session.

The GST Council typically meets every quarter; consequently, this meeting—held after nearly a year—is considered significant for the business community and the industrial sector. The previous meeting had involved discussions on proposals regarding tax rate revisions and the simplification of procedures under 'GST 2.0'.

What issues will be in focus during this meeting?

The full agenda for the meeting has not yet been finalized. However, reforms and regulations discussed in the previous meeting may be taken forward.

Particular attention will be paid to the following issues:

Simplifying the GST registration process for businesses.
Relaxation and improvements in rules related to GST audits.
Issues concerning Input Tax Credit (ITC) for certain goods and services.
Review of the appellate mechanism for GST-related matters.
Assessing the revenue status of states and the Centre following last year's tax rate changes.

Will there be further changes to GST rates?

Following the rate revisions last year, the revenue status of both the Centre and the states will be monitored. Additionally, there have been persistent demands from certain industry segments to review GST rates applicable to their goods and services. However, it remains unclear whether an immediate decision regarding these demands will be taken at the September 12 meeting. The final agenda is yet to be determined; therefore, expectations of a GST reduction on any specific good or service cannot be considered certain at this stage.

Why are changes to ITC rules being deemed necessary?

Ahead of the GST Council meeting, the issue of ITC (Input Tax Credit) is of significant importance to businesses. According to Manoj Mishra, Partner and Head of Tax Dispute Management at Grant Thornton Bharat, there is a need to review the ITC-related rules that trigger the most disputes and litigation.

Under the current system, a business's eligibility for ITC is linked to whether or not its supplier has deposited the tax with the government. The problem arises because the purchasing business cannot fully control or monitor the supplier's tax deposit process. Consequently, there is a demand to make the rules more practical in order to reduce ITC-related disputes.

Focus on the Supreme Court's Gameskraft case

Reducing GST-related litigation is also a key expectation from this meeting. Manoj Mishra stated that the focus should be on minimizing disputes arising from factual issues and the interpretation of rules.

In this context, the Supreme Court's verdict in the Gameskraft case will also be closely watched. In other words, the meeting on September 12 could prove significant not only for tax rates but also for simplifying GST procedures and resolving disputes for businesses.