The GST council is expected to discuss a key change on Saturday. GST Council may revoke retrospective tax demands on online gaming companies.
Officials say this change to the central GST (CGST) Act will allow the Centre and states to waive unpaid GST due to legal confusion or common business practices. The law committee suggested this change to fix problems where companies paid lower taxes due to confusion over the law.
GST Council May Remove Retrospective Tax Demands on Online Gaming Companies
The GST Council is considering a new rule that could cancel past tax demands for online gaming companies. The law committee has suggested adding a new section, called Section 11A, to the CGST Act. This section would let the government decide not to collect GST that wasn’t charged or was charged too little because of common business practices.
The GST Council will discuss this idea at their meeting on June 22. If they agree, this change will help online gaming companies by canceling old tax bills that arose due to unclear rules.
Proposal to Fix GST Issues for Online Gaming Companies
The law committee has proposed a new rule to help with tax problems where companies pay lower taxes due to unclear rules. They suggested adding a section to the GST law, allowing central and state governments to fix these issues if the GST Council recommends it. This new rule would apply when companies didn’t pay enough tax because they were following common business practices. However, this new rule won’t help companies that have paid too much GST. Those companies won’t be able to get refunds for the extra taxes they paid.
Proposed GST Change Aims to Provide Clarity and Relief to Online Gaming Sector
In the financial year 2023-24, the Directorate General of Goods and Services Tax Intelligence (DGGI) found 6,323 tax evasion cases, amounting to Rs 1.98 lakh crore. The online gaming sector was hit the hardest, with tax evasion notices totaling over Rs 1 lakh crore.
To address these issues, a new legislative change has been proposed. This change aims to clarify the GST rules and provide relief to businesses struggling with confusing tax regulations. The law committee has suggested adding Section 11A to the CGST Act.
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