The Goods and Services Tax (GST) Council is set to meet in Delhi on September 9 to discuss the implementation of the newly introduced Section 11A in the Central Goods and Services Tax Act (CGST) of 2017.

The meeting will focus on interpreting the amendment of the section in a bid to grant relief to demand for retrospective tax. It will have implications for the real-money gaming (RMG) — online games where players can wager and win real money — industry and other sectors, an official said.

In its 53rd meeting held in June, the council had recommended the insertion of Section 11A to  regularise non-levy or short-levy of GST.

Section 11A seeks to provide a legal safeguard against punitive retrospective tax demand and potentially alleviate financial burdens on industries facing outstanding GST dues.

An official told Moneycontrol, “11A amendment has been passed. Corresponding circular is awaited and a discussion to this effect will be held in the next Council meeting on September 9. The circular will centre on how to apply and interpret the law pending approval from the council.”

Once implemented, it will reduce legal disputes as well.

“The GST Council is expected to exercise powers of Section 11A to reduce litigation woes,” said Ankit Jain, Partner at Ved Jain & Associates. “We’re hopeful that the matter comes up for discussion and a clarification is issued,” he added.

Implications for RMG and other sectors

The council’s decision may have major implications for the RMG sector, which has been grappling with significant GST retrospective tax demand pertaining to a period between July 1 , 2017 — the day GST was rolled out — and March 31, 2023.

Last December, the finance ministry had said that 71 show cause notices were issued to online gaming companies for their alleged GST evasion worth over Rs 1.12 lakh crore.

Businesses providing corporate guarantees are also hoping for clarity on past tax liabilities.

“Section 11A represents a significant legal development in the GST framework. It offers a crucial safeguard against the punitive application of retrospective tax demand,” SR Patnaik, Partner, Cyril Amarchand Mangaldas, told Moneycontrol.

He emphasised that this provision could resolve disputes involving corporate guarantees, employee secondments, and reimbursements to information technology (IT) and airline companies.

The council's decision could mark a significant step toward reducing litigation and promoting ease of doing business by regularising past trade practices and settling long-pending tax disputes across various sectors.