The 55th GST Council Meeting was held on 21st December 2024 in Jaisalmer, Rajasthan. The meeting was chaired by the Union Finance and Corporate Affairs Minister and saw the participation of key dignitaries, including the Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers, Deputy Chief Ministers, Finance Ministers from various states and union territories, and senior officials from the Ministry of Finance. This article provides a detailed overview of the meeting’s key highlights, decisions, and their implications.
Key Decisions from the 55th GST Council Meeting
1. Extension for Group of Ministers (GoM)
-The GoMs formed to address issues like compensation cess, rate rationalization, and health insurance were given an extension to submit their reports.
2. GST Exemption for Payment Aggregators
-Payment aggregators handling transactions below Rs. 2,000 were granted GST exemption. This exemption does not extend to payment gateways or fintech services.
3. No GST on Penal Charges by Banks/NBFCs
-Penal charges collected by banks and NBFCs for non-compliance with loan terms will no longer attract GST.
4. Exemption on Dried Black Pepper and Raisins
-Black pepper and raisins supplied by agriculturists were exempted from GST.
5. Tax Clarification on Caramelized Popcorn
-Caramelized popcorn will be taxed similarly to sugar-added products, unlike salted popcorn, which is subject to 5% GST.
6. GST on Food Delivery Charges
-Deliberations on GST applicable to food delivery charges by quick-commerce platforms were deferred to a future meeting.
7. Taxation on Used Electric Vehicles (EVs)
-Used EVs sold by individuals to other individuals will not attract GST. However, refurbished EVs sold by businesses will incur an 18% GST on the margin value.
8. Reduced Compensation Cess for Merchant Exporters
-Compensation cess on supplies to merchant exporters was reduced to 0.1%, aligning with the GST rate on such supplies.
9. IGST Exemption for IAEA Equipment
-Imports of equipment and consumable samples by the International Atomic Energy Agency (IAEA) inspection team were exempted from IGST, subject to specific conditions.
Changes in GST Rates
|
S.No |
Goods/Services |
HSN/SAC Code |
Current Rate |
Recommended Rate |
Status |
|
1 |
Fortified rice kernels |
1904 |
18% |
5% |
Cheaper |
|
2 |
Gene therapy for life-threatening diseases |
– |
Taxable |
Exempted |
Cheaper |
|
3 |
Food items for free distribution under government programs |
19/21 |
Higher |
5% |
Cheaper |
|
4 |
ACC blocks (50% fly ash content) |
6815 |
5% |
12% |
Costlier |
|
5 |
Black pepper/raisins by agriculturists |
0904 |
5% |
Exempted |
Cheaper |
|
6 |
Approved NSDC skill training partners |
9992 |
18% |
Exempted |
Cheaper |
|
7 |
Used EV sales (individual to individual) |
– |
Higher |
Exempted |
Clarified |
|
8 |
Used EV sales (refurbished by businesses) |
– |
12% |
18% (on margin) |
Clarified |
|
9 |
LRSAM subsystems and similar software |
9023 |
Taxable |
Exempted |
Cheaper |
|
10 |
Bank/NBFC penal charges for loan defaults |
– |
Taxable |
Exempted |
Clarified |
Key Amendments Recommended by the GST Council
1. Invoice Management System (IMS)
-Section 38 of the CGST Act and Rule 60 of the CGST Rules will be amended to:
-
Provide a legal framework for generating FORM GSTR-2B based on taxpayer actions in Invoice Management System.
-
Ensure seamless reversal of input tax credits via new rules.
2. Late Fee Waivers for GSTR-9C Filing
-Late fees for delayed filing of GSTR-9C for FY 2017-18 to 2022-23 will be waived if filed by 31st March 2025.
3. Reduction in Pre-Deposit for Appeals
-The pre-deposit requirement for penalty-only cases has been reduced to 10% when filing appeals before the Appellate Tribunal.
Broader Expectations and Recommendations
Health Insurance and GST Exemptions
-Exemptions were recommended for:
-
Term life insurance policies.
-
Health insurance premiums for senior citizens.
-GST on non-senior citizen health insurance premiums was proposed to drop from 18% to 5%.
Reforms in Inverted Duty Structure
-Rationalization of tax rates to reduce input tax credit accumulation was anticipated.
GST on Petroleum Products
-Deliberations on bringing aviation turbine fuel (ATF), petrol, and diesel under GST were discussed to allow input tax credit claims.
Compensation Cess Roadmap
-The GoM sought an extension to finalize recommendations on the cess applicability for utility vehicles and luxury goods.
Taxpayer Risk Profiling
-Advanced biometric-based Aadhaar authentication and risk profiling mechanisms were introduced to curb fraudulent GST Registrations.
FAQs
1. What is the GST Council’s role?
Ans. The GST Council decides on GST rates, exemptions, and laws for the smooth implementation of GST across India.
2. Was there any discussion on GST for petroleum products?
Ans. Yes, the inclusion of petroleum products like ATF, petrol, and diesel under GST was deliberated.
3. What changes were made regarding health insurance GST rates?
Ans. Recommendations included GST exemption on premiums for term life insurance and senior citizens’ health insurance. For others, the rate may reduce to 5%.
4. Are used electric vehicles exempt from GST?
Ans. Used EVs sold between individuals are exempt. However, refurbished EVs sold by businesses incur an 18% GST on the margin value.
5. What are the late fee waivers for GSTR-9C filings?
Ans. Late fees for FY 2017-18 to 2022-23 filings will be waived if filed by 31st March 2025.
6. What is the Invoice Management System (IMS)?
Ans. IMS is a framework to streamline input tax credit claims and ensure accurate generation of FORM GSTR-2B based on taxpayer actions.
7. What are the changes in compensation cess?
Ans. The compensation cess for supplies to merchant exporters was reduced to 0.1%, with other cess applicability under review.
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