The upcoming 54th GST Council meeting could yield a significant number of decisions impacting various sectors, including India Inc, the oil & gas sector, and foreign shipping lines. According to sources, the GST Council is likely to deliberate on the taxation of oil & gas exploration.

“The Fitment Committee is likely to propose issuing clarification on the levying of GST on participating interest in oil & gas exploration contracts,” sources said.

They added, “The Fitment Committee, during its meetings, deliberated that any sub-contracting or passing on of the exploration contract to a new entity is liable under GST.”

The sources further added, “While proposing this, the Fitment Committee took the view that any subcontracting is also a supply of services and thus should attract GST. Not just this, the Fitment Committee also believes that passing on a contract is akin to selling assets, which attracts LTCG under Income Tax rules, and a similar treatment should apply under the GST regime.”

Given these scenarios, the GST incidence in such cases is expected to be 18% with ITC, as recommended by the Fitment Committee to the GST Council, sources said.

However, it is up to the GST Council to make a final decision.

Another item on the agenda is a proposal concerning the sharing of GST data, including personal information, with other government agencies, ministries, and government bodies under specific conditions. Sources indicated that the proposal would allow data sharing under certain conditions.

“The Council may consider conditions such as safety and security responsibility, sharing of data only after specifying the purpose, and prohibiting recurring data sharing,” sources said.

The data in question includes suppliers’ names, annual turnover, mobile numbers, premises addresses, email addresses, e-way bill data, and vehicle numbers of carriage, among others.

It is noteworthy that the 48th GST Council previously examined this proposal but failed to reach a consensus, leading to its deferral.

Council members and experts had expressed concerns that such data sharing could compromise business confidentiality and lead to misuse. The proposal, if approved, may not go down well with the industry, according to experts who requested anonymity.

Finally, the agenda may also include a discussion on the GST liability of foreign shipping lines operating in India.

Sources say that relief for foreign shipping lines is likely to take more time.

“The GST Council’s nominated Fitment Committee is expected to seek more time for a comprehensive review of the sector and its challenges, and to determine whether existing laws, rules, or circulars provide sufficient clarity or if a new clarificatory circular is needed,” sources privy to the matter said.

This issue is significant because the Directorate General of GST Intelligence (DGGI) has issued notices to foreign shipping lines with branch offices in India, demanding 18% GST on the reverse charge mechanism for services supplied by the foreign head office to its Indian branch offices.

It remains to be seen what decisions the GST Council will make when it meets on Monday, September 9, in New Delhi.