Amid growing concerns over the ease of doing business, particularly in the service sector, the Government of India is reportedly considering offering some Goods and Services Tax (GST) relief to major corporates, including Infosys, foreign airlines, and shipping lines. The move comes in response to recent challenges faced by these entities, including a wave of notices from the Directorate General of GST Intelligence (DGGI), which has raised compliance burdens. The potential relief measures are expected to be discussed during the upcoming 54th GST Council meeting on September 9, 2024.

Potential GST Relief Measures

According to sources cited by CNBC-TV18, the Finance Ministry's Department of Revenue is actively working on changes aimed at improving clarity and reducing compliance burdens. These changes are likely to be introduced as part of a broader effort to enhance the ease of doing business in India. The government is expected to revisit and potentially ease some provisions introduced in the June circular during the September GST Council meeting.

One of the key focus areas for the Centre is addressing the concerns raised by Infosys, foreign airlines, and foreign shipping lines, which have been at the receiving end of a spate of notices from the DGGI. These notices have added to the compliance challenges faced by these entities, prompting the government to consider relief measures that could halt the issuance of such notices.

Group of Ministers (GoM) on GST Rate Rationalisation

Ahead of the GST Council meeting, the Group of Ministers (GoM) on GST rate rationalisation is scheduled to meet to review the progress made so far and discuss the future course of action. This meeting marks the GoM's first gathering since its formation, with Bihar Deputy Chief Minister Samrat Chaudhary serving as the convenor.

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The GoM comprises ministers from seven states, including West Bengal Finance Minister Chandrima Bhattacharya, Karnataka Revenue Minister Krishna Byre Gowda, Kerala Finance Minister K N Balagopal, Uttar Pradesh Finance Minister Suresh Kumar Khanna, Goa Transport Minister Mauvin Godinho, and Rajasthan Medical and Health Services Minister Gajendra Singh.

During its previous meeting in June, the GST Council directed the GoM to work on a comprehensive overview of GST rate rationalisation. This includes reviewing the status of the work completed so far, identifying aspects that need further attention, and addressing pending issues.

Upcoming 54th GST Council Meeting

The 54th GST Council meeting, scheduled for September 9, 2024, is expected to focus on several critical issues, including the way forward on GST rate rationalisation. The current GST regime includes five broad tax slabs: zero, 5%, 12%, 18%, and 28%. In addition, a cess is levied on luxury and demerit goods, over and above the highest 28% tax rate.

The rate rationalisation exercise aims to simplify the GST structure and address issues related to compliance and tax administration. The GoM's recommendations, along with feedback from the broader GST Council, will play a crucial role in shaping the future of the GST regime in India.

Conclusion

As the 54th GST Council meeting approaches, all eyes are on the potential GST relief measures that could be introduced to address the concerns of major corporates like Infosys, foreign airlines, and shipping lines. The government's focus on enhancing the ease of doing business and simplifying the GST structure reflects its commitment to fostering a more business-friendly environment in India. The upcoming discussions and decisions made during the GST Council meeting will be critical in determining the direction of India's tax policies and their impact on the corporate sector.

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