The 50th meeting of the Goods and Services Tax (GST) Council, chaired by Union finance minister Nirmala Sitharaman, was a milestone event in a myriad of ways. Besides changes in tax rates across certain segments, the meeting also took important decisions to facilitate trade and streamline compliances.
A feather in the cap was the GST Council offering startups and private players the same leeway offered to government bodies like the Isro, which will provide financial relief and incentivise growth to the segment and further augmentation of capabilities in indigenous launch. The space launch segment is expected to grow at a CAGR (compound annual growth rate) of 13 per cent with increased private participation, advanced technology adoption and cost-effective launch services.
Import of anti-cancer drugs for personal use will no longer attract the Integrated Goods and Services Tax (IGST). Medicines and food for special medical purposes used in treatment of rare diseases have also been exempted from the IGST when imported for personal use.
The reduction of GST rates on imitation zari (yarn) to five per cent from earlier 12 per cent will help small weavers. Supply of raw cotton, including kala cotton by agriculturists to cooperatives is taxable under the reverse charge mechanism.
The GST Council’s clarification that food and beverages in cinema halls are taxable as restaurant service is important for urban entertainment business. Clubbed with cinema tickets, however, the entire package will attract GST at the rate applicable to the service, exhibition of cinema.
Significantly, the meeting also put an end to discussions on taxing casinos, horse racing and online gaming, making it a maximum of 28 per cent for all. Tax will be applicable on face value of chips purchased in case of casinos, full value of bets placed with bookmakers in case of horse racing and full value of bets placed in case of online gaming.