The 54th GST Council meeting is set for September 9 in New Delhi, with a packed agenda addressing key issues across multiple industries. According to sources, the Council may consider providing relief to foreign airlines operating in India through branch offices. The GST Council's fitment committee is expected to propose exempting the import of services by a foreign airline's head office abroad when received without consideration. This move could regularize past demands and offer relief to airlines facing significant GST claims.
Recently, the Directorate General of GST Intelligence (DGGI) issued show-cause notices to 10 foreign airlines, demanding ₹10,500 crore in taxes for services provided by their head offices abroad. Airlines like Emirates (₹7,550 crore), Etihad Airways (₹1,660 crore), and Saudi Arabian Airlines (₹612 crore) are among those affected.
The FMCG sector could also see relief, with the Council expected to clarify the GST rate on snacks and namkeen, potentially reducing litigation for companies like ITC, PepsiCo, and Haldiram. The fitment committee is likely to recommend a 12% GST rate for snacks prepared through extrusion processes moving forward, while treating past periods at 18%.
In the education sector, the Council may exempt GST on grants and donations received by universities and research institutions, including IIT Delhi. Recently, seven educational institutions were issued show-cause notices demanding ₹220 crore in unpaid taxes.
Online gaming, casinos, and horse racing are also on the agenda, following the Council's earlier decision to impose a 28% GST rate on these sectors from October 1, 2023. However, clarity on past demands from 2017-2023, which total over ₹1 lakh crore, may be deferred pending further data.
The IT sector is also likely to be discussed, with the Council expected to clarify GST rules for software services, cloud computing, and data hosting companies like Infosys, Amazon, Google, and Meta. This could include defining the place of supply and determining what qualifies as an export of services.
Meanwhile, the electric vehicle (EV) sector may face disappointment, as the fitment committee is not expected to recommend exempting GST on EV charging services at public stations. Additionally, the committee may advise against reducing GST on the manufacturing of EV components like Li-ion cells, battery packs, and electric motors to prevent duty inversion.
Lastly, the Council may address rate parity between car and two-wheeler seats, with a proposal to increase the GST on car seats from 18% to 28%, while maintaining the current 28% rate on two-wheeler seats.
The upcoming meeting promises significant discussions that could shape the future tax landscape for various sectors.
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