On 22nd June, the 53rd meeting of the GST council was conducted. To refine the tax rates and service exemptions under the GST regime, various recommendations were made in the meeting. Union Finance Minister Nirmala Sitharaman addressed the meeting and deliberated on distinct proposals to facilitate GST applicability for goods and services.
Key Updates on the 53rd GST Council Meeting
During the GST Council meeting, MoS Finance Pankaj Chaudhary was present, along with the chief ministers of Goa and Meghalaya, as well as deputy chief ministers of Bihar, Haryana, Madhya Pradesh, and Odisha. Additionally, finance ministers from various states and Union Territories, along with other senior officials, also attended the GST meeting to discuss GST rates, services and more.
Modification in GST Rates
- Aircraft Parts and Tools: 5% IGST on imports of parts, components, testing equipment, tools and tool-kits of aircrafts.
- Milk Cans: 12% GST on all steel, iron, and aluminium milk cans.
- Carton Boxes: GST on cartons, boxes, and cases of paper reduced from 18% to 12%.
- Solar Cookers: 12% GST on all solar cookers whether single or dual energy source
- Poultry Machinery Parts: 12% GST on parts of poultry keeping machinery.
- Sprinklers: 12% GST on all types of sprinklers, including fire water sprinklers.
GST Exemption on GST Council Meeting
- Defence Imports: IGST exemption on specified defence items extended until 30th June, 2029.
- RAMA Programme Imports: IGST exemption on research equipment/buoys under RAMA programme.
- SEZ Imports: Compensation Cess exemption on imports by SEZ units/developers since 01.07.2017.
Amendments for Other Goods
- Exemptions on the supply of aerated beverages and energy drinks to unit-run canteens under the Ministry of Defence, and ad hoc IGST exemptions on technical documentation for AK-203 rifle kits imported for Indian Defence forces are the other revisions included.
Service Immunities on GST Council Meeting
The GST council offered adjustments regarding services.
- Specific Indian Railways services and intra-railway supplies have been waived, like platform tickets, retiring rooms, cloak rooms, battery-operated car services, and intra-railway transactions.
- Accommodation Services: Waiver of accommodation services for relief to students and working professionals. Accommodations up to Rs 20,000/month per person for stays of 90+ days have been waived.
- SPV Services: SPV services for Indian Railway and maintenance services furnished via Indian Railways to SPVs have been waived.
Additional Recommendations in the 53rd GST Council Meeting
- Waive interest and penalties for Section 73 demand notices for FY 2017-18, 2018-19, and 2019-20 if full tax is paid by 31.03.2025.
- Time limit for ITC on invoices/debit notes u/s 16(4) for FY 2017-18 to 2020-21 is considered as 30.11.2021 for returns filed by this date.
- Monetary limits for department appeals: Rs 20 lakh (GST Appellate Tribunal), Rs 1 crore (High Court), Rs 2 crore (Supreme Court).
- The GST council suggested the worldwide execution of biometric-based Aadhaar authentication for GST registration applicants in phases. It has the motive to improve registration integrity, and curb bogus ITC claims through the bogus invoices.
- For filing appeals under the GST Act pre-deposit amount was reduced to ease cash flow: maximum declined to Rs. 20 crores CGST and SGST.
- Amend the CGST Act to initiate the three months for GST Appellate Tribunal appeals from a notified date.
- If the amount is available in the Electronic Cash Ledger on the due date, no interest on the late return filing is there
- From April 1, 2025 Sunset clause for new Anti-profiteering applications
- If the amount is available in the Electronic Cash Ledger on the due date then no interest on the late return filing is there.
- To facilitate the financial load on suppliers, from 1% to 0.5% TCS rate by Electronic Commerce Operators (ECOs) was reduced.
- To limit IGST refund in cases where export duty is liable to get paid, an amendment is suggested.
- The limit gets diminished from Rs. 2.5 lakh to Rs. 1 lakh for reporting B2C inter-State supplies invoice-wise in FORM GSTR-1.
- Every month TDS deductors are used to file the GSTR-7 without a late fee for the filing of the Nil returns.
Demand Notices in CGST Act Amendments, Common Time Limits
- For the CGST Act 2017, the GST council suggested amendments to establish a constant time limit to issue the demand notices and orders, irrespective of engagement of fraud, suppression, or willful misstatement. The same revision has the purpose of easing the procedure of the legislation. The time permitted to the assesses to claim the reduced penalties via filing the tax demanded including the interest has been extended from 30 days to 60 days for FY 2024-25 onwards.
Additional Amendments for Services
- Co-insurance Premium: Declared as no supply under Schedule III with regularization of past cases.
- Re-insurance Commission: Under Schedule III with regularization of past cases, declared as no supply.
- GST on Reinsurance Services: Regularized on ‘as is where is’ basis for specified insurance schemes.
- Retrocession Clarification: Retrocession is defined as re-insurance of re-insurance, qualified for exemption.
- RERA Collections: Clarified as exempt from GST under entry 4 of Notification No.12/2017-CTR.
- RuPay Debit Cards: Sharing incentives are not levied to tax when defined by NPCI in consultation with banks.