The prospective impact of the coalition government on GST reforms is analyzed by legal experts in an interview with Moneycontrol. Despite the new government, the general direction of GST reforms is expected to continue without significant hindrance, as historically, the agenda has garnered bipartisan support. However, certain issues, such as the rationalization of GST rates, may be deprioritized, while emphasis on imposing checks and balances on the powers of tax officers may resurface.
Sudipta Bhattacharjee, Partner at Khaitan and Co, expressed that the ongoing GST reforms are likely to progress, but certain aspects may be delayed due to the coalition government’s considerations, such as ‘coalition dharma.’ Additionally, the contentious issue of the powers of GST officials to make arrests is pending judgement from the Supreme Court, with several petitions challenging its constitutional validity.
The upcoming GST Council meeting on June 22, the first since the formation of the coalition government, is anticipated to address various matters, including the imposition of 28 percent GST on the full face value of bets placed on online gaming platforms. This decision has prompted online gaming companies to prepare their case for the council’s consideration.
Considering the coalition nature of the new government, some experts anticipate a shift in the government’s approach to taxation and fiscal policies. Ankit Jain, a partner at accountancy firm Ved Jain and Associates, stated that a change in the government’s priorities is plausible. Moreover, Rohit Jain, Managing Partner at Singhania & Co, mentioned that the new government’s focus is likely to center on enhancing compliance and aligning the Central GST Act with recently passed GST rules, aiming to reduce scrutiny from tax officers.
The contentious issue of the 28 percent GST levy on online gaming has garnered attention, with experts highlighting the potential for the coalition government to reconsider this taxation, emphasizing its impact on the growing digital economy. The industry seeks a reduction in taxes to foster growth and development. The retrospective imposition of the 28 percent GST on online gaming has led to numerous challenges faced by gaming companies, including alleged GST evasion notices and ongoing legal battles, with expectations for a review from the GST Council after the elections. Additionally, there is optimism regarding the rollback of retrospective GST demands against online gaming companies, as expressed by legal representatives.