55th meeting of GST Council

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:

• 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.