India’s 50th GST Council Meeting July 2023- Key Outcomes for Businesses ( July 12, 2023 )

India’s 50th GST Council Meeting, held in July 2023, has introduced significant developments and key decisions that impact various sectors. From tax rate changes to exemptions and measures to strengthen the GST implementation, these outcomes have far-reaching implications for businesses operating in India.

One notable decision is the imposition of a 28 percent GST rate on gaming, horse racing, and casinos, raising concerns among online gaming companies. On the positive side, the healthcare sector receives exemptions on crucial pharmaceutical imports, benefiting the industry.

Measures have also been proposed to enhance compliance, simplify processes, address tax liabilities, and strengthen reporting. This article highlights the key outcomes, providing insights into changes in tax rates, exemptions, strengthening GST implementation, and measures aimed at enhancing compliance. 

India’s 50th GST Council Meeting, concluded on July 11, 2023, witnessed significant developments and key decisions that have far-reaching implications for various sectors. Notable decisions include the imposition of a 28 percent GST rate on gaming and gambling activities, which raised concerns among online gaming companies.

• On a positive note, the healthcare sector received a boost as the council exempted GST on essential imports of pharmaceutical products. Additionally, the meeting focused on strengthening GST implementation through amendments in tax rates, reporting requirements, and compliance measures. These decisions aim to streamline processes, enhance compliance, and address key challenges faced by businesses under the Goods and Services Tax (GST) system.

In this article, we delve into the key decisions of the 50th GST Council Meeting and their potential impact on businesses in India.

Changes in GST tax rates

GST Council approves rate reduction on four items

• GST rate on uncooked, unfried and extruded snack pellets reduced from 18 percent to five percent.
• GST rate on fish soluble paste will be reduced from 18 percent to five percent.
• GST rate on LD slag is to be at par with blast furnace slag. It has been changed from 18 percent to five percent to encourage better utilization of this product and for environmental protection.
• GST rate on Imitation Zari thread or yarn brought down from 12 percent to five percent.

Other changes relating to goods

• Exemption from IGST will be provided for personal imports of Dinutuximab (Quarziba) medicine.
• IGST exemption will be extended to medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases enlisted under the National Policy for Rare Diseases, 2021 for personal imports. The exemption will also apply to FSMP imported by Centres of Excellence for Rare Diseases or on the recommendation of the listed Centres of Excellence.
• Supply of raw cotton by agriculturists to cooperatives will be taxable under the reverse charge mechanism (RCM). Issues related to the past period will be regularized based on the existing interpretation.
• The entry in the compensation cess notification will be amended to include all utility vehicles meeting specific parameters. These criteria include a length of over 4000 mm, an engine capacity surpassing 1500 cc, and a ground clearance of 170 mm or higher. Furthermore, it is clarified through an explanation that “ground clearance” refers to the measurement in an unladen condition.
• Issues related to trauma, spine, and arthroplasty implants prior to July 18, 2022, will be regularized due to genuine interpretational issues.
• Issues related to desiccated coconut for the period July 1, 2017, to July 27, 2017, will be regularized due to genuine interpretational issues.
• The earlier ad valorem rate as applicable on March 31, 2023, will be notified for the levy of Compensation Cess on pan masala, tobacco products, etc., where it is not legally required to declare the retail sale price.
• RBL Bank and ICBC Bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum.
• Consequential changes in notifications will be made in line with the new Foreign Trade Policy 2023.
• Issues related to GST on plates and cups made of areca leaves prior to October 1, 2019, will be regularized.
• Issues related to GST on biomass briquettes for the period July 1, 2017, to October 12, 2017, will be regularized.