The 55th Goods and Services Tax (GST) Council meeting held on 21st December 2024 by the Union Finance Nirmala Sitharaman made some essential decisions about taxes on vehicles and GST rates. They declared that corporations will have to pay an 18% GST rate on the profit for selling their used electric vehicles (EVs) and older vehicles. In the meeting, there are various changes have been seen throughout the meeting.
The council also furnished a clear transparency on how popcorn will be taxed. They said that caramel popcorn will still have an 18% tax, and pre-packaged and flavoured popcorn will be taxed at a lower rate of 12%. For plain unpacked popcorn it is not labelled, the tax will be just 5%.
Key Decisions Made During the 55th GST Council Meeting
Here we have discussed the 55th GST Council Meeting key highlighters including tax rate modifications and tax compliance simplifications:
What Items Will Get Less Costly?
Fortified Rice Kernels (FRK): A 5% GST reduction has been applied to supply through the Public Distribution System (PDS), with the motive of assisting the weaker society sections.
Read Also: GST Council 1st Meeting to 54th Meeting Updates with PDF
Long Range Surface-to-Air Missile (LRSAM) Assembly systems: IGST system exemption, sub-systems, and tools used for LRSAM manufacture.
Food Preparations for Free Distribution: A 5% GST concessional rate is extended to the food inputs provided under the policies of government economically weaker sections.
Pepper and Raisins (Supplied by Agriculturists): Categorised as not obligated to GST on selling directly via agriculturists.
Inspection Equipment for IAEA: IGST exemption on equipment and consumable samples imports for the inspection via the International Atomic Energy Agency.
Gene Therapy: Full GST waiving applied to make the treatments cheaper.
Which Items Will Get Costlier?
Old and Used Vehicles (Including EVs): A GST rate has been increased from 12 to 18 per cent on the sale of all old and used vehicles apart from petrol and diesel variants.
Autoclaved Aerated Concrete (ACC) Blocks: If containing more than 50 per cent fly ash content then draw a 12% GST.
Ready-to-Eat Popcorn: There will be a 12% tax on Pre-packed and labelled ready-to-eat snacks, and an 18% GST rate will be imposed if they are caramelised. “Ready-to-eat popcorn, which comprises a mixture of salt and spices, has the character of nankeens, which attracts a 5 per cent GST at present if it is not pre-packaged and labelled.
Penalty-Only Appeals: Higher pre-deposit for the penalty merely appeals as per the Appellate Authority.
Sponsorship Services by Corporates: Now carried under the Forward Charge Mechanism, increasing costs for sponsors.
Additional Modifications
Penal Charges: For non-compliance with loan terms no GST is liable to get paid on the penalties collected through the banks and NBFCs.
Vouchers- On the voucher transactions the GST council has suggested no GST since they are neither a supply of goods nor a supply of services.
Updating definition: It was suggested by the council to revise the definition of ‘pre-packaged and labelled’ to cover all the commodities that are objected for retail sale and comprising not exceeding than 25kg or 25 litre, which are ‘pre-packed’ as defined under the Legal Metrology Act, or a label affixed thereto is required to bear the declarations under the provisions of the Act and rules.
