GST Council Meeting: What’s Getting Cheaper And Costlier? KNOW HERE

The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, took place in Jaisalmer, Rajasthan, on December 21.

The council deliberated on significant changes to GST rates, exemptions, and compliance measures, impacting the prices of various goods and services.

What’s Cheaper?

1. Gene Therapy: The council approved a full GST exemption on gene therapy, making it more accessible for patients.
2. Fortified Rice Kernels (FRK): GST on fortified rice kernels, used in public distribution programs, has been reduced to 5% from 18%.
3. AAC Blocks: Autoclaved aerated concrete blocks containing over 50% fly ash will now attract a reduced GST rate of 12%.
4. Raisins and Pepper: Fresh or dried black pepper and raisins, when supplied directly by agriculturists, will be GST-exempt.
5. Bank Penal Charges: Penal charges levied by banks and NBFCs for loan non-compliance will no longer attract GST.
6. Payment Aggregators: Payments under ₹ 12,000 handled by aggregators are now exempt from GST.
7. Merchant Export Supplies: The compensation cess rate on supplies to merchant exporters has been reduced to 0.1%.

What’s Costlier?

1. Used Cars, Including EVs: The GST rate on old and used vehicles, including electric vehicles, has increased from 12% to 18%. However, this applies only to business transactions; private sales remain exempt.
2. Caramelised Popcorn: Caramelised popcorn will continue to attract 18% GST, while non-packaged, salt-and-spice popcorn is taxed at 5%, and packaged ones at 12%.

Other Key Recommendations of the Meeting

• Sponsorship Services: Sponsorship services provided by corporate entities will now fall under the forward charge mechanism.
• Hotel Services: Definitions of “declared tariff” have been revised to align GST with the actual supply value of accommodation.
• Exemption for Defence and Atomic Energy Equipment: Import exemptions have been extended to equipment related to the LRSAM missile system and International Atomic Energy Agency (IAEA) inspections.

Pending Decisions

Several issues remain unresolved, with decisions deferred for future discussions:

• Aviation Turbine Fuel (ATF): States have not reached consensus on including ATF under the GST framework.
• Floor Space Index (FSI): Taxation on FSI remains undecided.
• Calamity Cess: A Group of Ministers will study the possibility of levying a calamity cess to assist states affected by natural disasters.
• Health Insurance Premium: The proposal to reduce GST on health and life insurance premiums is awaiting input from regulators.
• Quick Commerce and E-Commerce: GST on quick commerce services, e-commerce platforms, and food delivery charges is yet to be finalised.
• Rate Rationalisation: Discussions on revising GST rates for 148 items are still ongoing.

The council recommended reducing the pre-deposit required for filing appeals in cases involving penalties. Additionally, changes have been proposed to make GST registration easier for small businesses.

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