Uncertainty looms over next GST Council meet as poll dates can be announced anytime

With the schedule for the General Election 2024 likely to be announced anytime soon, uncertainty prevails over the next meeting of the GST Council. As on date, there is no indication from the Government about the next meeting of the Council. The last meeting (52^nd) took place on October 7, 2023.

The Procedure and Conduct of Business Regulations of the GST Council says, “The Council shall meet at least once in every quarter of the financial year.” Further, notice of the meeting shall be sent at least 7 days prior to the date of the meeting of the Council. Agenda notes to the meeting under notice shall be sent at least 3 days prior to the date of the meeting. There is a special provision which says, with the approval of the Chairperson, an emergency meeting of the Council can be convened by the Secretary with a notice of 2 days.

The Model Code of Conduct (MCC) by the Election Commission prohibits the political party in power to make a policy decision which could, directly or indirectly, influence voters. However, in exceptional situations, a policy decision can be made and announced only after it is vetted by the Commission. Also, ongoing development work will not be affected. The MCC comes into effect from the date of poll announcement, and ceases to be in operation once the Election Commission issues a notification for constitution of the new house.

• Also read: GST Appellate Tribunals: Govt issues notification to set up 31 State Benches

Now, the big question is can the Council meeting take place once the MCC is in place? Post the constitution of the Council in 2016, there has been just one General Election (2019). During that year, MCC came into operation on March 10, while the 34^th GST Council meeting took place on March 19. However, the meeting discussed the operational details for implementation of the recommendations made by the council in its 33^rd meeting (February 20 and 24, 2019) for a lower effective GST rate of 1 per cent in case of affordable houses, and 5 per cent on construction of houses other than an affordable houses. No big decision was made in the said meeting.

As on date, there is one big issue before the GST Council -- on August 2, 2023, Finance Minister Nirmala Sitharaman, while announcing 28 per GST on full face value for online money gaming, casinos, and horse racing, had said that the recommendation would  be reviewed six months after the date of implementation i.e., October 1. The six-month period ends on March 30.

• Also read: GST rejig likely only after 2024 LS polls

Experts have mixed reactions on the delay in calling a Council meeting. Ankur Gupta, Practice Leader (Indirect Tax) at SW India, feels this is not the first time that the meeting has been delayed beyond a quarter. “Ignoring the delay in decisions/ clarifications pending at the Council’s end, there are no legal repercussions for not abiding by the procedures. In the initial years, the frequency of meetings was more; however, with the GST law more or less settled, the frequency of meetings seems to be getting reduced,” he said.

According to Vivek Jalan, Partner with Tax Connect Advisory, GST is a business tax and has to evolve with time, and that’s why the GST Council meets once every few months. “While sometime may have passed, yet internally, the officers of The GST Law Committee are meeting and keeping the wheels of GST moving. In the next meeting, we may see another set of big bang policy changes,” he said.

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