GST Council May Decide On Decriminalisation Of GST Offences, Setting Up Appellate Tribunals On Saturday

The GST Council, chaired by Finance Minister Nirmala Sitharaman, is likely to decide on a number of issues such as decriminalisation of GST offences, setting up of Goods and Services Tax Appellate Tribunals and tax evasion by pan masala and gutkha companies at its meeting on Dec. 17.

According to sources, the law committee of the GST Council, comprising tax officers from the Centre and states, in a report has suggested increasing the monetary threshold for launching prosecution for GST offences.

The law committee has also suggested that the fee payable by taxpayer for compounding of GST offences be lowered with a view to improving ease of doing business.

However, the issue of taxation of online gaming, casinos and horse racing is unlikely to be taken up by the GST Council on Saturday as the GoM on the matter is yet to submit its report.

"Usually we need to give notice to members in the GST Council before tabling any agenda. Since the report has not yet been submitted, it is unlikely that... it would come for discussion in Council," an official said.

The GoM, in its last meeting in November, had agreed on 28% GST on online gaming, casinos and horse racing.

The report of the GoM on tax evasion by pan masala and gutkha companies is likely to be taken up for discussion in the Council, sources said.

Regarding decriminalisation of GST offences, the law committee has suggested raising the threshold of launching prosecution to Rs 20 crore, from Rs 5 crore at present. Launching of prosecution by taxmen means commencement of legal proceedings against the offender.

The Council, in its meeting to be held virtually on Dec. 17, is also likely to consider removing those penal offences which are already covered under the Indian Penal Code from the GST Act to make it more taxpayer friendly.

The committee has also suggested that the fee for compounding offences be reduced to 25% of the tax amount, from 50-150% currently.

Currently as per the GST Act, the amount payable for compounding of offences is 50% of the tax amount involved subject to a minimum Rs 10,000. Maximum fees for compounding is 150% of the tax involved.

Once the proposal of GST law decriminalisation is approved by the GST Council, amendments to the central GST Act is expected to be introduced in the ongoing Winter session of Parliament.

Once approved by Parliament, states would be required to amend their state GST laws in their legislative assemblies.

With regard to setting up of Goods and Services Tax Appellate Tribunals, the GoM has suggested that the tribunals should consist of two judicial members, and one technical member each from the Centre and states, besides a retired Supreme Court judge as President, sources said.

The GoM on GSTATs was set up in July under the chairmanship of Haryana Deputy Chief Minister Dushyant Chautala.