The Goods and Services Tax (GST) Council met for its 55th gathering in Jaisalmer, Rajasthan under the chairmanship of the Union Finance & Corporate Affairs Minister.
Recommendations of the Council
- Changes in GST rates of Goods and Services:
Goods
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Services
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- GST rate on Fortified Rice Kernel reduced to 5%.
- To increase the GST rate from 12% to 18 % on sale of all old and used vehicles, including EVs other than those specified at 18%
- It is not applicable in case of unregistered persons.
- Autoclaved Aerated Concrete (ACC) blocks containing more than 50% fly ash content will attract 12% GST.
- Exempt:
- Pepper (whether fresh green or dried pepper) and raisins when supplied by an agriculturist is exempt.
- Exempt GST on gene therapy.
- 3 tier structure for Popcorns:
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- Ready to eat popcorn which is mixed with salt and spices attracts 5% GST, if supplied as other than pre-packaged and labelled
- It will attract 12% GST if supplied as pre-packaged and labelled.
- Caramelised popcorn (under the category of sugar confectionary) will attract 18% GST.
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- Exemption: RBI regulated Payment Aggregators are eligible since they fall within the ambit of ‘acquiring bank’.
- The exemption does not cover payment gateway and other fintech services which do not involve settlement of funds.
- No GST payable on the ‘penal charges’ levied and collected by banks and NBFCs from borrowers for non-compliance with loan terms.
- To bring supply of the sponsorship services provided by the body corporates under Forward Charge Mechanism.
- Exemption of GST on the contributions made by general insurance companies to the Motor Vehicle Accident Fund,for providing compensation/ cashless treatment to the victims of road accidents
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- Other Changes:
- Taxability of Vouchers:
- Transactions in vouchers shall be treated neither as a supply of goods nor as a supply of services.
- Distribution of vouchers on principal-to-principal basis is exempt from GST.
- Vouchers distributed on principal-to-agent basis, the commission/fee or any other amount charged by the agent for such distribution is taxable under GST.
- Insertion of new provision for Track and Trace Mechanism:
- To insert an enabling provision in CGST Act, 2017
- It will be based on a Unique Identification Marking affixed on the said goods or packages and help in tracing specified commodities throughout the supply chain.
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Unaddressed Issues
- Restructuring and Rate Rationalisation for Insurance sector: The proposed rate reduction for life and health insurance premiums would have made opting for insurance policies affordable and enable wider coverage.
- GST Rate Rationalisation and Inverted Duty Correction: Rationalisation of the present four tax slabs (5%, 12%, 18% and 28%) into 3 tax slabs was deferred again along with the correction for inverted duty structure considering its wider impact on trade and industry.
- Food delivery e-commerce: The decision on revising tax rates for food delivery through e-commerce has been deferred.
- Inclusion of Aviation Turbine Fuel: No consensus has been arrived on this and hence the same remains outside the GST framework at present.
About The GST Council
- Constitutional Body: GST Council is formed under Article 279A of the Indian Constitution.
- Objective: The Council’s primary objective is to ensure efficient GST implementation by deciding on tax rates, exemptions, and administrative procedures.
- Secretariat: The Secretariat of the Council is located in New Delhi, and the Union Revenue Secretary acts as the ex-officio Secretary to the Council.
- Members:
- Chairperson: The Union Finance Minister
- The Union Minister of State in-charge of Revenue or Finance
- State Representatives: The Minister in-charge of Finance or Taxation or any other Minister nominated by each state government.
- Permanent Invitee: The Chairperson of the Central Board of Excise and Customs (CBEC) as a permanent invitee (non-voting) to all proceedings of the Council.
- Decision Making: Every decision of the Council is to be taken by a majority of not less than 3/4th of the weighted votes of the members present and voting at the meeting.
- Persuasive Value: The Supreme Court has ruled that recommendations of the Goods and Services Tax (GST) Council only have persuasive value, and cannot be binding on the Centre and states.
- Weightage of Votes:
- The vote of the central government shall have a weightage 1/3rd of the total votes cast in that meeting.
- The votes of all the state governments combined shall have a weightage of 2/3rd of the total votes cast in that meeting.
December 25, 2024
