53rd GST Council Meeting Highlights: All Major Decisions You Need To Know

53rd GST Council Meeting Highlights: In a significant move to streamline and improve the goods and services tax (GST) framework, the GST Council, chaired by Finance Minister Nirmala Sitharaman, convened its 53rd meeting on June 22, 2024. The Council’s recommendations encompass a broad range of adjustments, from GST rate changes on goods and services to measures aimed at facilitating trade and reducing litigation. Here are the key highlights of the Council’s recommendations:

GST Rate Changes on Goods:

1. Uniform IGST Rate for Aircraft Parts: A uniform rate of 5% IGST will now apply to imports of parts, components, testing equipment, tools, and tool-kits for aircrafts, regardless of their HS classification, to boost MRO activities.
2. Milk Cans: All milk cans, made from steel, iron, or aluminum, will attract a 12% GST.
3. Carton Boxes, and Cases: The GST rate on cartons, boxes, and cases of both corrugated and non-corrugated paper or paperboard has been reduced from 18% to 12%.
4. Solar Cookers: All solar cookers, whether single or dual energy sources, will now attract a 12% GST.
5. Poultry Keeping Machinery Parts: The existing 12% GST on poultry keeping machinery will now explicitly include parts.
6. Sprinklers: All types of sprinklers, including fire water sprinklers, will attract 12% GST.

New Exemptions:

1. Defence Imports: IGST exemption on imports of specified items for defense forces extended for five more years until June 30, 2029.
2. RAMA Programme Imports: IGST exemption on imports of research equipment and buoys under the RAMA programme.
3. SEZ Imports: Exemption of Compensation Cess on SEZ imports for authorized operations effective from July 1, 2017.
4. Defence Canteen Supplies: Exemption of Compensation Cess on aerated beverages and energy drinks supplied to authorized customers by Unit Run Canteens under the Ministry of Defence.

GST on Services:

1. Indian Railways Services: Exemption for services provided by Indian Railways to the general public, including sale of platform tickets and battery-operated car services.
2. Accommodation Services: A separate entry to exempt accommodation services valued up to Rs. 20,000 per month per person for stays of a minimum of 90 continuous days.
3. Insurance Services: Co-insurance premiums and re-insurance commission transactions between insurers will be treated as no supply, regularizing past practices.

Facilitation Measures:

1. Waiver of Interest and Penalty: Insertion of Section 128A in CGST Act to waive interest and penalties for fiscal years 2017-18 to 2019-20 if the full tax demanded is paid by March 31, 2025.
2. Reducing Litigation: Establishing monetary limits for government appeals in GST cases to reduce litigation.
3. Pre-Deposit Reduction: Reducing the pre-deposit amount required for filing appeals to ease financial burden on taxpayers.
4. ENA Taxation: Amending GST law to exclude Extra Neutral Alcohol (ENA) used for manufacturing alcoholic liquor for human consumption from GST.
5. TCS Rate Reduction: Reducing the Tax Collected at Source (TCS) rate for electronic commerce operators from 1% to 0.5%.

Additional Recommendations:

1. Biometric Aadhaar Authentication: Nationwide rollout of biometric-based Aadhaar authentication for GST registration to curb fraudulent claims.
2. Common Time Limit for Demand Notices: Introducing a common time limit for issuance of demand notices and orders for the fiscal year 2024-25 onwards.
3. Anti-Profiteering Sunset Clause: Setting a sunset date of April 1, 2025, for anti-profiteering applications, with cases to be handled by the GST Appellate Tribunal thereafter.

The 53rd GST Council meeting took place on June 22, 2024, in New Delhi.