GST Council May Discuss Empowering States To Issue Digitised Movie Tickets

The GST Council will consider empowering states to issue electronic movie tickets, a move towards digitisation that is expected to check tax evasion, a senior government official said.

According to the proposal, which will be discussed in the council’s next meeting on June 21, states would be given the power to issue electronic tickets at cinema halls that sell tickets at the counter without paying goods and services tax, the official said on condition of anonymity, adding that this would help in stopping tax evasion by single-screen operators who collect tax on tickets, but do not deposit it with the government.

The issue was discussed in one of the previous meetings of the GST Council as well, and the matter was referred to the Law Committee under the indirect tax regime. The Law Committee, the official said, suggested that states be given an option whether they want to digitise the sale of movie tickets or not.

The proposal, according to the official, was moved by Kerala to give states the right to issue electronic ticket to check tax evasion. The concern was that states are losing tax revenue even when they are not imposing a local body tax or an entertainment tax. States have the power to levy local body tax or an entertainment tax on movie tickets over and above GST.

“As business-to-consumer segment is anticipated as one of the areas for GST evasion, having a mandatory e-ticketing system would possibly help in checking tax evasion,” according to Abhishek Jain, indirect tax partner at EY India.

Tax On Neutral Alcohol?

The GST Council may also consider levying an 18 percent tax on extra neutral alcohol which is used for making alcoholic beverages, the official quoted earlier said. This comes after states had earlier opposed the idea citing it would need a constitutional amendment as GST is not levied on the supply of the alcoholic liquor for human consumption. The matter, according to the official, was referred to the Attorney General, and the AG is said to have opined in favour of levying GST on extra neutral alcohol.

E-Invoices Must For Large Businesses

Another proposal that the GST Council may consider is to make businesses above a certain annual turnover generate e-invoices for every transaction on a government portal, the official said, adding that businesses will get a unique number for every electronic invoice generated, which would be matched with the invoices reported in the sales return and taxes paid. The threshold for companies is proposed at Rs 50 crore, but the final decision will be taken by the GST Council, the official said.

Geo-Tag

To keep a check on GST registration of sham companies that wrongly claim input credit without paying tax, the central government has also proposed geo-tag for companies registered under the GST regime to verify their credentials, the person cited earlier said.

Extension Of Anti-Profiteering Body

The GST Council will also consider extending the term of National Anti-Profiteering Authority due to the pending anti-profiteering cases, the official said. The National Anti-Profiteering Authority was set up in November 2017 for a period of two years.

The GST Council may look at the possibility of cutting tax rate on some products to boost sluggish demand in the economy, but no official proposal has been prepared on this yet, the official quoted earlier said.