GST council meeting outcomes: No GST on penal charges for loan defaults by banks and NBFCs

The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman on Saturday, brought several significant changes. The council decided to exempt indirect tax for payment aggregators handling transactions below Rs 2000. Additionally, the rate of compensation cess on supplies to merchant exporters has been reduced to 0.1%. The exemption for missile parts has also been extended.

During the media briefing, the Finance Minister announced that no GST would be applied to penal charges levied on borrowers by banks or financial institutions.