49th GST Council Meeting Highlights: Live Updates, Agenda, Expectations, and Latest News

The 49th GST Council meeting took place on Saturday, 18th February 2023, in New Delhi. It is the next GST Council meeting held after two months since the last one happened on 17th December 2022. 

Union FM Nirmala Sitharaman was the chairperson, and this meeting was the first one soon after the presentation of the Budget 2023. The 49th GST Council meeting was the third meeting to occur almost immediately in the same month as the Budget presentation. The years 2017 and 2019 saw similar meetings where crucial decisions were taken.

Highlights from 49th GST Council meeting

FM began briefing the media on the outcomes at 5 p.m. on 18th February 2023. 

• Two GoM reports were accepted, one with slight modifications.
• All GST compensation dues to be cleared today since June 2022; To fund it using own resources and future revenues.
• GST rate cut on Rab/Liquid jaggery from 18% to nil (lose) or 5% (labelled/packaged).
• GST on pencil sharpeners has come down from 18% to 12%.
• GST on tracking devices fixed on durable containers now nil, subject to conditions.
• Services by courts and tribunals to be taxed under RCM- Renting of premises by registries of courts/tribunals for commercial use to local bodies will attract RCM.
• Exemption is granted to educational institutions and Central and State educational boards for conducting entrance exams to any authority, board or a body set up by the CG or SG including National Testing Agency (NTA) for entrance exams for admission to educational institutions.
• Rationalisation of late fee for delayed filing of annual returns FY 2022-23 onwards - 
  • Registered persons with AATO up to Rs.5 cr is fixed at Rs. 25 per day subject to max cap 0.02% of turnover.
  • Registered persons with AATO more than Rs.5 cr to 20 cr is fixed at Rs 50 per day subject to max cap 0.02% of turnover.
• GST amnesty for GSTR-4/9 & 10 announced - Late fee is reduced.
• Special composition scheme for certain sectors - pan masala, Gutkha, etc.
• GoM on appellate tribunal was considered with some modifications which will be re-drafted and circulated with members of GST Council for approval.
• MUV classification could not be taken up due to short of time; GST on cement did not come up with the fitment committee; GST on millet-based health products needs more discussion.
• One single bench was recommended by the GoM on GST appellate tribunal with primary bench in Delhi and states having their benches- Each appellate tribunal bench to have two technical members and two judicial members; Modification in how the selection of  members of judicial panel is to be carried out was voiced out by the a few members of GST Council, needing more state representation; It was recommended that the technical members shall be represented from the centre and states at 50% each.
• GoM report on pan masala- special composition scheme and capacity-based taxation was accepted.
• The GoM report on online gaming could not be taken up today due to the absence of the FM heading the committee.
• The Council recommended to revise Section 62 (Best Judgement Assessment) by increasing the time period for filing of return for allowing deemed withdrawal of such best judgment assessment order, from the current 30 days to 60 days, that can be extended further by another 60 days, subject to certain conditions.
• Further, FM announced a conditional deemed withdrawal of assessment orders in previous cases where the relevant return could not be filed within 30 days of the assessment order but filed later along with applicable interest and late fee up to a specified date, irrespective of whether appeal was filed or not against the assessment order, or whether the said appeal was decided or not.

49th GST Council Meeting Press Release

For the complete press release by the Ministry of Finance, click on the below link -

49th GST council meeting press release

49th GST Council Meeting Live Updates

3:15 p.m.: Sources: Matter on setting up of the GST appellate tribunal pushed to the next Council meeting to allow time to refine the recommendations of the GoM’s reports by incorporating suggestions from some states.
2:37 p.m.: Sources: GST Council to reassemble after a lunch break and continue its discussion on the GoM's report on GST appellate tribunal.
2:30 p.m.: Sources: GoM report on setting up of appellate tribunal taken up today for discussion. Reports suggest that the 14-15 states have voted against the recommendations of the GoM on the manner of setting up GST appellate tribunals. 
2:15 p.m.: The Union FM is expected to address the media/press with the outcomes of the meeting at 4:15 p.m. today (18th February 2022).
11:15 a.m.: 49th GST Council meeting began with the arrival of the Union FM, Smt Nirmala Sitharaman at Vigyan Bhavan, New Delhi, along with the Union Minister of State for Finance Shri M P Chaudhary, and Finance Ministers of States & UTs and Senior government officers.

Expectations from the 49th GST Council meeting

The 49th GST Council meeting date is 18th February 2023, and the 49th GST Council meeting place is in New Delhi. Here are some of the expectations from the next GST Council meeting.

GoM report for GST on Pan Masala

The Group of Ministers (GoMs) may table its report on taxation of 'Gutkha/chewing tobacco' and 'Pan Masala' businesses at this Council meeting. The ‘GST on Pan Masala’ report could not be taken up, although it was on the agenda of the 48th GST Council meeting.

The GoM on Pan masala was formed to assess the requirement and benefits of imposing a capacity-based valuation system for the levy of GST on pan masala and similar products. Further, the refund of the accumulated Input Tax Credit (ITC) for exports of these products shall be approved against the letter of undertaking. 

Moreover, the GST Council may take measures for imposing mandatory registration of machines, specific monthly GST returns having details of the machine, clearance, inputs, special compliance rules such as compulsory e-invoicing, e-way bill, GPS installation or FAST tag, unique identification marking, CCTV camera installation and a hefty penalty for non-compliance.

GoM report for establishing a GST Appellate Tribunal may not be on agenda

The latest media reports indicate that the decision to set up the Goods and Services Tax Appellate Tribunals (GSTAT) based on the GoM report, may no longer be on the agenda.

It has been a long-standing demand of the taxpayers to have a fully functional GST Appellate Tribunal. 

The report by the Head of the GOM, Haryana Deputy CM Dushyant Chautala, was submitted to the Council in the latter half of 2022 and was expected to be taken up at the 48th GST Council meeting. However, it required an elaborate discussion and hence, was postponed to the upcoming Council meetings.

GoM report on online gaming and similar activities may not form part of the agenda

The GST Council had to deliberate the taxation of online gaming, horse racing, and casinos under GST at the upcoming GST Council meeting which seems to not take place as per the latest media reports.

The GoM led by the Meghalaya Chief Minister Conrad Sangma had to table the final report on GST on online gaming at the upcoming meeting.

There have been differences amongst the members of the GoM in concluding the base value for tax applicability. 

The latest report issued towards the end of 2022 is most likely like the first report, submitted earlier that year, except for the divergent opinions explained above.

The committee recommended a fixed 28% GST rate on horse racing, casinos and online gaming in its first report. The report also mentioned the base value for taxation. 

Presently, online gaming is imposed two different GST rates, 18% on skilled games without betting and 28% on games of chance, such as betting and gambling. 

However, the issue persisting is the base value for computing GST, which did not get consensus within the committee. Yet, the GST Council may not take a call at the upcoming Council meeting.

GST rate rationalisation & revenue augmentation 

The Central and state governments aim to widen the taxpayer net at every GST taxation stage. They intend to generate a higher tax mop-up. Presently, the monthly GST collections work to an average of about Rs.1.4 lakh crore, while there are 1.40 crore taxpayers registered under GST.

It is to be seen how the Council will balance the expectations of states/UTs and the taxpayers at the 49th GST Council Meeting.

IGST Act may be amended for redefining place of supply for goods transportation

As per the latest media reports, the GST Council may also discuss on creating parity in the manner of taxing Indian and foreign shipping lines for Indian exporters. It could revise the Integrated Goods and Services Tax (IGST) Act to amend the place of supply provision involving goods transportation to the ‘location of the recipient’ rather than the current ‘destination of goods’.  

Presently, Indian exporters pay GST on freight for exporting goods as billed by the Indian shipping lines. In contrast, they don’t have to pay tax on the charges made by the foreign shipping lines. The amendment allows identical taxability for both foreign and Indian shipping lines for exempting or taxing IGST on the transportation of goods by shipping vessels into or out of India.

GST rate cut on electric vehicles, millet-based health products and more

Before the Budget 2023, several industrial associations called on the Finance Minister to cut tax rates on several items. One of the popular products is the input used in Electric Vehicles (EV), whose input is lithium-ion battery cells and packs, and the industry expects a rate cut on it to 5% from the present rate of 18%. The move will encourage domestic EV manufacturing in India and higher consumption. 

The previous media reports of a GST rate cut on cement in line with the industry demand may not be decided but the fitment committee may bring up the matter before the GST Council. 

The rate cuts on millet-based health products with more than 70% millet content could be another item on the agenda. The fitment committee has suggested a nil rate where millet-based health products are supplied in loose form, whereas a 5% when supplied in pre-packaged and labelled form.

The increase in the GST rate on pencil sharpeners earlier done to address the inverted tax structure may be re-visited at this Council meeting as school children mostly use it. It may be brought down to 12% from 18%. 

Also, the textile industry continues to face an irrational inverted tax structure that hurts business. The fabric attracts 5% GST, whereas the yarn is taxed at 12% and the polyester chip at 18%. Experts opine that the government must fix a uniform tax rate for the entire textile product range.

Another popular one is the GST on health insurance and certain life insurance products, which must be reduced from 18% per many insurers' demands. It reduces the premium cost and makes it affordable for policy buyers to purchase health insurance.

Demand from the hospitality industry this Budget 2023 was to tax all rooms at 12%. Currently, the government levies a GST of 12% on hotel rooms with a room tariff of up to Rs.7,500 and 18% for hotel rooms priced above Rs.7,500. Further, the hospitality industry wants a full input tax credit claim in line with global standards. Currently, the input tax credit can be availed only if the hotel booking is in the same state as the GST-registered state of the business.

The 48th GST Council meeting was held on 17th December 2022. Meanwhile, watch this space for the 49th GST Council meeting live updates, 49th GST council meeting PDF, 49th GST Council meeting press release, 49th GST council meeting outcome or the 49th GST Council meeting highlights, February 18 GST Council meeting updates, and the latest GST Council meeting news.