The gross goods and services tax (GST) collection for June 2024 stood at Rs 1.74 trillion, marking 7.7 per cent year-on-year (Y-o-Y) growth, an official source disclosed to Business Standard.
This Y-o-Y growth is notably less than the 12.4 per cent and 10 per cent increases recorded in April and May, respectively. Month-on-month figures, too, were flat.

In May this year, the gross GST collection amounted to Rs 1.73 trillion, while April witnessed a record-high GST collection of Rs 2.1 trillion. The June revenue brought the financial year-to-date total to Rs 5.57 trillion, said the source.

With Goods and Services Tax (GST) reaching its seventh-year mark, one should acknowledge and appreciate the endless efforts of the Indian Government for implementing it in a country which has had a history of complex and multi-tier indirect tax laws. The Ministry of Finance, along with the GST Council, has undertaken a major responsibility of bringing in many clarifications by issuing over 300 circulars in the last seven years, focusing on trade facilitation, reducing the burden of compliance, and providing relief to taxpayers. This has demonstrated to the global market that India is capable of rapid growth and evolution, with emphasis on enhancing the ease of doing business in the economy.

This approach has also benefited the Government, which is evident from the significant increase in GST revenue collections over the last few years.

Introduced seven years ago, the Goods and Services Tax (GST) has simplified compliance, improved tax buoyancy and increased states' revenues, but fake invoices and fraudulent registration remain a big challenge for policymakers trying to curb tax evasion.

Rolled out on July 1, 2017, Goods and Services Tax (GST) streamlined 17 taxes and 13 cesses into a 5-tier structure, simplifying the tax regime. The turnover threshold for registration rose to Rs 40 lakh for goods and Rs 20 lakh for services (up from Rs 5 lakh on average under VAT). GST also reduced 495 different submissions (challan, forms, declarations, etc) across states to just 12.

In seven years, the number of registered taxpayers has risen to 1.46 crore from 65 lakh in 2017. Average monthly GST revenues, soared from around Rs 90,000 crore in 2017-18, to about Rs 1.90 lakh crore in 2024-25. According to the government data, GST has improved tax buoyancy from 0.72 (pre-GST) to 1.22 (2018-23). Despite compensation ending, state revenues remain buoyant at 1.15.

The Central Board of Indirect Taxes and Customs (CBIC) on Thursday clarified that if an MNC subsidiary in India as service recipient is eligible to claim full input tax credit (ITC) under the GST, the value declared by the overseas affiliate in the invoice will be treated as the taxable value.

But in cases, where the foreign affiliate does not raise an invoice, it would be presumed that the value of services is nil and no GST is required to be paid.

Companies had earlier raised concerns about tax demands arising from the reverse charge mechanism (RCM) for such services, where no consideration was made. “The clarification will help in avoiding misinterpretation and litigation on this issue by the GST authorities,” said Darshan Bora, partner at Economic Laws Practice (ELP).

The GST (Goods and Services Tax) council has clarified the taxability of wreck and salvage values in motor insurance claims, stating that general insurers have to pay GST liability in case of disposal or sale of the salvage after settling the claims.
Salvage value refers to the value of damaged or destroyed property that can be recovered and sold after an insurance claim has been settled. This clarification came in response to requests from industry players seeking clarity on salvage value.

There have been representations from stakeholders seeking clarification as to whether, in the case of motor vehicle insurance, GST is payable by the insurance company on salvage or wreckage value earmarked in the claim assessment of the damage caused to the motor vehicle.

ESOPs given by foreign companies to employees of its Indian subsidiary at prevailing market value will not attract GST, the CBIC has said.
However, Employee Stock Option (ESOP)/Employee Stock Purchase Plan (ESPP)/ Restricted Stock Unit (RSU) provided by a foreign company to its India subsidiary employee would come under GST net if an additional amount over and above the cost of securities/shares is charged by the foreign holding company from the domestic arm.

This clarification forms part of the 16 circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), following the meeting of the GST Council on June 22.
Some Indian companies provide the option to their employees for allotment of securities/shares of their foreign holding company as part of the compensation package as per the terms of the contract of employment.

In a relief for foreign firms giving loans to Indian subsidiaries, tax authorities have said goods and services tax (GST) will not be imposed on them, subject to some caveats.
Additional fees, commissions, or related payments — over and above the amount charged as interest — on these loans will attract GST at 18 per cent, the Central Board of Indirect Taxes and Customs (CBIC) has said.


The move is expected to end uncertainties on taxing loans/credit among group companies -- a matter plaguing foreign entities.

The issue arose during GST audits and resulted in tax notices being served.

In taxation terms, the matter involved valuing services of foreign affiliates when the Indian recipient can claim full input tax credit (ITC).
The CBIC has said the open market value of such services can be the invoiced amount by the Indian company, assuming full ITC is available.
If no invoice exists, the service value can be considered nil.

Suppliers giving post-sale discounts through credit notes under GST will have to ensure that the client gives an undertaking or a CA certificate stating that the ITC availed on the discount value has been reversed, the CBIC has said.
Currently, there is no mechanism to track whether the Input Tax Credit (ITC) on such discounts has been reversed or not.

Till the time a functionality is made available on the common portal to enable the suppliers as well as the tax officers to verify the reversal, the supplier may procure a certificate from the recipient of the supply, issued by the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that the recipient has made the required proportionate reversal of ITC at his end in respect of such credit note issued by the supplier.

In cases, where the amount of tax (CGST+SGST +IGST and including compensation cess, if any) involved in the discount given by the supplier to a recipient through tax credit notes in a financial year does not exceed Rs 5 lakh, then instead of CA/CMA certificate, then the supplier will have to get an undertaking from the said recipient.

Telecom operators will have to pay goods and services tax (GST) on spectrum, based on their payment schedule, the Central Board of Indirect Taxes and Customs (CBIC) has said. In cases where the full upfront payment is made by the telecom operator, GST would be payable when the payment of the said upfront amount is made or is due, whichever is earlier, the CBIC has said.

In other cases, where deferred payments made by the telecom operator in specified installments, GST would be payable as and when the payments are due or made, whichever is earlier, it has further said.

The clarification by the CBIC follows the GST Council meet on June 22, where it had decided a clarification would be made regarding time of supply in respect to the allotment of spectrum to telecom companies, in cases where payment of licence fee and spectrum usage charges is to be made in installments. A GST of 18% is to be levied.

The latest round of spectrum auctions started on June 25 and concluded on June 26 after seven rounds, in which the expiring spectrum in 2024 and the unsold spectrum of previous spectrum bid, held in 2022, were put to auction.

Suppliers giving post-sale discounts through credit notes under GST will have to ensure that the client gives an undertaking or a CA certificate stating that the Input Tax Credit (ITC) availed on the discount value has been reversed, the CBIC has said. Currently, there is no mechanism to track whether ITC on such discounts has been reversed or not.
EY Tax Partner Saurabh Agarwal said these documents, with a unique ID number, serve as proof for audits and ensure consistent application of GST rules on post-sale discounts.

The Goods and Services Tax (GST) Council on Saturday announced several steps to ease the compliance burden of taxpayers and reduce litigation, tweaked the rates for a few items and set a sunset date of April 1, 2025, for the controversial anti- profiteering mechanism.

Finance minister Nirmala Sitharaman said after the 53rd meeting of the Centre-state Council, also the first in the tenure of the new government at the Centre, that the Council would take up important agenda of rate rationalisation at the next meeting, likely in August. The re-constituted Group of Ministers on this, headed by Bihar deputy chief minister Samrat Choudhary, would make a detailed presentation on the work done so far and the unfinished agenda in the next meeting of the Council, the minister said.

However, the issue of 28% levy on “full face value of bets” in online gaming did not feature in Saturday’s discussions.

The minister, however, clarified, that “the issues that were not taken up this meeting, will be taken up in the August meet”.

The GST Council has exempted services related to hostel accommodation outside educational institutions, up to Rs 20,000 per person per month, provided the student stays in the hostel for at least 90 continuous days. This condition aims to prevent hotels from misusing the exemption. This was decided at the 53rd GST Council meeting that was chaired by the Finance Minister Nirmala Sitharaman. This followed her pre-Budget consultations with finance ministers of states and Union Territories.

“Waiver of interest and penalty for past GST demands is a great step which would hopefully bring down the litigation to some extent. Sunset clauses for anti profiteering provisions will bring in much needed certainty for industry. Reduction in pre deposit for filing the appeal also is an important one and would help the industry from a cash flow standpoint,” Pratik Jain, Partner, PwC India, said.

Additionally, the Council has exempted the purchase of railway tickets and payments for waiting room and cloak room charges from GST. Services such as battery-operated vehicle rides and intra-railway services will also be GST-free.

The Goods and Services Tax (GST) Council in its Saturday meeting has approved several compliance measures, aiming at reducing tax litigation and enhancing ease of business across the sectors.
The all-powerful Council waived interest and penalty for demand notices issued for the financial years 2017-18, 2018-19, and 2019-20. This is for cases where the taxpayer pays the full amount of tax raised in the notice by March 31, 2025. The waiver is conditional and does not cover wilful defaulters.

“The Council at its 53rd meeting has taken key decisions on trade facilitation, easing compliance, and easing the burden of taxpayers,” said Union Finance Minister Nirmala Sitharaman, who chaired her first Council meeting under the NDA-led government. “This will benefit MSMEs, traders, and taxpayers,” she said while briefing the media post-Council meeting in Delhi.

She said some of the agenda items couldn’t be taken up due to a paucity of time and could be addressed in the next Council meeting post-budget or before the end of August, FM Sitharaman said.

GST taxpayers will now have the option to amend outward supply or sales return form GSTR-1 before payment of taxes for a month or quarter.
The GST Council in its meeting on Saturday had recommended providing a new optional facility by way of Form GSTR-1A to facilitate taxpayers to amend the details in Form GSTR-1 for a tax period and/or to declare additional details.

GSTR-1A will, however, have to be filed before filing of return in GSTR-3B for the said tax period.
This will facilitate the taxpayer to add any particulars of supply of the current tax period missed out in reporting in form GSTR-1 of the said tax period or to amend any particulars already declared in GSTR-1 of the current tax period (including those declared in IFF, for the first and second months of a quarter, if any, for quarterly taxpayers), to ensure that correct liability is auto-populated in GSTR-3B.

Currently, GST taxpayers file outward supply return GSTR -1 by the 11th day of the subsequent month. Taxpayers with an annual turnover of up to Rs 5 crore can file GSTR-1 quarterly within the 13th day of the end of the quarter.

The Goods and Services Tax (GST) Council on June 22 recommended an amendment to the Central Goods and Services Tax (CGST) Act, 2017, that would empower the government to discuss and overrule any retrospective GST demand sent by tax authorities.

In the 53rd GST Council meet, the Council recommended inserting Section 11A to the GST Act to empower the government to regularise instances of non-levy or short-levy of GST, based on the Council's recommendations, when such tax was not being paid due to common trade practices.

The amendment, once passed by the parliament and state legislatures, is expected to pave the way towards providing relief to India's burgeoning real-money gaming (RMG) companies who have received GST notices for the period between July 2017 and March 2023.

The amendment however applies to all sectors, not just real-money gaming sector.

The GST Council in its 53rd meeting under the Chairmanship of Finance Minister Nirmala Sitharaman on Saturday proposed major relief to taxpayers by recommending sunset clause for the anti-profiteering provisions.

It recommended that starting April 1, 2025, no new applications regarding anti-profiteering would be accepted by Competition Commission of India (CCI).

Meanwhile, the Council also proposed that anti-profiteering cases would be shifted to the GST Appellate Tribunal (GSTAT) from the CCI.

Revenue Secretary Sanjay Malhotra during the press conference clarified, “The sunset date is April 1, 2025. However, the cases which have already been registered will continue to be heard and they will be decided. The other decision taken in this regard is shift of the hearing of these cases from the CCI to the principal the GSTAT when it is functional.

The Goods and Services Tax (GST) Council’s decision to provide tax exemption on corporate guarantees in two scenarios – transactions that qualify as “export of services” and recipients who can claim full input tax credit – may not provide any relief to the power or real estate sectors, which are facing tax liabilities to the tune of Rs 1,000 crore, experts say.

The Council in its earlier meeting had decided that the consideration for the issue of corporate guarantee would be 1% of the value of guarantee or the actual amount charged, whichever is higher. A notification to enforce it was issued in October 2023, which made GST applicable at a rate of 18% to corporate guarantees between parent and subsidiaries and other related parties.

Post the enforcement, several infrastructure firms, including real estate and power companies, filed writ petitions before courts, challenging the 18% levy. An official source had told FE that 50-60 such companies have received tax notices after the GST Council’s decision in late October to tax these guarantees, and the aggregate tax demands raised via these notices was over Rs 1,000 crore.

The GST Council in its Saturday meeting might mandate the GST Appellate Tribunal (GSTAT) to adjudicate anti-profiteering cases and introduce “sunset date”, allowing filing of such complaints only up to April 1, 2025.
This is in line with the recommendation of the law committee under the GST Council after Competition Commission of India (CCI) expressed its inability to handle such matters, saying that it was not their core function.

CCI has disposed of just 27 cases since December 1, 2022. While about 140 cases are pending for adjudication. Besides, 184 matters are pending in various high courts where the order of previous authority were challenged.
The anti-profiteering provisions under the GST law make it mandatory for suppliers of goods and services to pass on the benefit of any reduction in the rate of tax, or the benefit of input tax credit, to recipients by way of commensurate reduction in prices.
National Anti-Profiteering Authority was set up in November 2017 to check unfair profiteering activities by registered suppliers which was subsumed with CCI on December 1, 2022.

GST Council meet: About 84% of India Inc. has expressed strong support for the GST implementation and has called for progressive steps to take the regime to a new level. A Deloitte India survey stated that the companies have reported that their confidence in the reform has significantly increased from 59% in 2022 to 84% in 2024.

Deloitte India conducted the survey to capture India Inc.’s views on this transformational tax reform. The survey stated 88% of the top C-suite leaders indicated areas of challenge, including aspects around audits and assessments, underscoring the need for continued simplification, technology integration and capacity building.

GST refors, which subsumed 17 local taxes and levies, was rolled out on July 1, 2017.

The survey also pointed out there is widespread feedback for enabling effective dispute resolution mechanisms, with 91 percent of leaders endorsing the extension of audit timelines to address issues and improve compliance.

Besides, more than 70% respondents advocated for aligning pre-deposit requirements for GST appeals with the pre-GST era norms, aiming to streamline the dispute resolution processes.

The GST Council is likely to regularise taxation issues arising on a host of goods and services, including the supply of cereals, pulses, flour packets of over 25 kg. The Council is set to decide whether they would fall in the category of pre-packaged and labelled commodity, and attract 5 per cent GST. The panel might exclude agricultural farm produce in packages of more than the said quantity from the scope of labelled.
GST levy on tobacco products across categories would be referred to the state panel looking into the issue of rate rationalisations. At present, tobacco is categorised as “sin good” and attracts highest GST of 28 per cent with additional cess. Industry has sought clarity and asked to keep maximum rate of 40 per cent (20 per cent each to state and Centre).