Parliament Passes CGST And IGST Amendment Bills 2023

Parliament on 11 August 2023 passed two money bills, the Central Goods and Services Tax (GST) Amendment Bill 2023 and the Integrated Goods and Services Tax (GST) Amendment Bill 2023.

Lok Sabha had passed this bill by voice vote without discussion on the bill presented in the House by Finance Minister Nirmala Sitharaman. Rajya Sabha also passed these bills by voice vote.

• The Central Goods and Services Tax Amendment Bill 2023 has been brought to amend the Central Goods and Services Tax Act 2017.

• The Integrated Goods and Services Tax Amendment Bill 2023 will amend the Integrated Goods and Services Tax Act 2017.

• The Central Goods and Services Tax Amendment Bill 2023 deals with online gaming, online money gaming and virtual digital assets.

• After passing the bill from the Parliament, now the states will get the bill amended in the state GST laws passed in their respective assemblies.

• The Integrated Goods and Services Tax Amendment Bill 2023 aims to exclude online money gaming from the definition of online information and data access and retrieval services.

• The GST Council, in its 50th meeting held in July last month, had recommended a 28 per cent tax on casino, horse racing and online gaming.

What will be the benefits of amending the law:

• After the amendment, now offshore entities will be required to obtain GST registration in India.

• The amendment will also provide for blocking of access to online gaming platforms located overseas in case of failure to comply with the registration and tax payment provisions.

• In the 50th meeting of the GST Council held in the month of July, it was decided to levy 28 per cent GST on the full face value of online gaming, casino and entry-level bets on horse racing.

• After this decision, many companies related to online gaming had objected to this decision, after which the 51st meeting of the GST Council was held again, in which the decision to impose 28 percent tax was upheld.

• At the same time it was also decided that this law would be reviewed after 6 months of its implementation.

• It is noteworthy that 28 percent tax on online gaming, casino and horse racing will be applicable from October 1.

Goods and Services Tax (GST):

• GST is one of the biggest indirect tax reforms in the country. GST was introduced through the 101st Constitutional Amendment Act, 2016.

• It was introduced with the slogan 'One Nation One Tax'.

• Indirect taxes like excise duty, value added tax, service tax, luxury tax etc. have been subsumed in GST.

• GST reduces the cascading effect of tax or the tax burden that is passed on to the end consumer.

Tax Structure under GST:

• Central GST to cover excise duty, service tax etc.

• State GST to cover VAT, luxury tax etc.

• Integrated GST (IGST) to cover inter-state trade.

• Integrated GST is not a tax in itself but a tax system to coordinate state and union taxes.

• It has a 4-tier tax structure of 5%, 12%, 18% and 28% for all goods and services under the slab.