GST Council Meeting No New Tax Increase; Decriminalisation Of Three Types Of Offences

The 48th meeting of the GST Council led by Finance Minister Nirmala Sitharaman recommended decriminalising three offences under the GST law on Saturday. The council also increased the threshold of launching criminal prosecution to Rs 2 crores, informed the Ministry of Finance after the meeting. 

In the press briefing after the meeting, Finance Minister Nirmala Sitharaman said that we completed 8 of the agenda points. There were two GoM issues which needed to be discussed but couldn’t be taken up, which were related to capacity-based taxation on tobacco and gutkha, the other relating to setting up of a (GST) tribunal. 

Sitharaman also clarified that no new taxes have been brought at the GST Council’s 48th meeting.

The Revenue Secretary Sanjay Malhotra informed that GST Council agreed to decriminalise certain offences, and the threshold of launching prosecution has been doubled to Rs 2 crore. He said, “Decriminalising certain offences including obstructing any officer from discharging his duties, threshold limit of tax amount for launching prosecution in any criminal offence under GST laws raised from Rs 1 cr to 2 cr for all offences except fake invoices.” 

To make GST act more taxpayer-friendly, the GST Council also considered removing penal offences which are already covered under the Indian Penal Code (IPC) from the GST Act.

The Council also agreed on exemptions on no claim bonus under insurance policies. The Revenue Secretary further said that the GST rate on the husk of pulses and Knives was reduced to nil from 5 per cent. GST on ethyl alcohol for the purpose of blending ethanol has been exempted. 

According to the Finance Minister, the council clarified that vehicle SUVs with an engine capacity exceeding 1,500 cc and length exceeding 4,000 mm with a ground clearance of 170 mm or above will attract a 22 per cent compensation cess.

Decriminalisation of offences under the GST law, setting up appellate tribunals and a mechanism to curb tax evasion in pan masala and gutkha businesses are among the issues slated to be discussed in the GST Council meeting, today. 

GST on online gaming and casinos was also expected to come up for deliberations at the Council meeting. The Group of Ministers (GoM), chaired by Meghalaya Chief Minister Conrad Sangma, set up last year on the issue had submitted its report to Finance Minister Nirmala Sitharaman on Thursday. The GoM, in its last meeting in November, had agreed on a 28 per cent GST on these segments.