What’s getting cheaper and costlier after the GST council meeting? Check the full list

The GST Council has made several recommendations to change GST tax rates, aiming to simplify the tax system and reduce the burden in specific areas.

55th GST Council Meeting Highlights

The 55th GST Council, chaired by Union Minister for Finance & Corporate Affairs Nirmala Sitharaman, met in Jaisalmer, Rajasthan, on December 21. The meeting resulted in several key recommendations:

What’s Getting Cheaper

Fortified Rice Kernel (FRK):

The GST rate on Fortified Rice Kernel (FRK), classified under HS Code 1904, has been reduced to 5%, making it more affordable.

Gene Therapy:

GST on gene therapy has been fully exempted to make it more accessible for medical treatments.

Contributions to Motor Vehicle Accident Fund:

Contributions made by general insurance companies from third-party motor vehicle premiums to the Motor Vehicle Accident Fund are now exempt from GST, simplifying collection and use of these contributions.

Vouchers:

No GST will apply to transactions involving vouchers, as they do not constitute a supply of goods or services. Related provisions are also being revised.

Penal Charges by Banks and NBFCs:

Penal charges levied by banks and Non-Banking Financial Companies (NBFCs) from borrowers for non-compliance with loan terms are not subject to GST.

Pre-Deposit for Appeals:

The pre-deposit required when filing an appeal before the Appellate Authority in cases involving only penalty amounts has been reduced, making the appeals process more accessible.

Additional GST Rate Changes

Exemptions and Concessions:

LRSAM System Equipment: IGST exemption extended to systems, sub-systems, equipment, parts, sub-parts, tools, test equipment, and software meant for the assembly/manufacture of LRSAM system.

IAEA Equipment: IGST exemption for imports of equipment and consumable samples by the International Atomic Energy Agency (IAEA) Inspection Team.

Food Inputs for Government Programs: Concessional 5% GST rate extended to food inputs under HSN 19 or 21 for free distribution to economically weaker sections under a government program.

Changes in Services:

Sponsorship Services: Sponsorship services provided by body corporates brought under the Forward Charge Mechanism.

Hotel Services: Definition of "declared tariff" omitted and definition of "specified premises" amended to link with the actual value of supply of any unit of accommodation.

Composition Levy Scheme Exemption: Taxpayers registered under the composition levy scheme excluded from the entry regarding renting of commercial/immovable property by unregistered persons to registered persons.

What’s Getting Costlier

Old and Used Vehicles:

The GST rate on the sale of all old and used vehicles, including EVs, increased from 12% to 18%.

Ready-to-Eat Popcorn:

Ready-to-eat popcorn mixed with salt and spices attracts 5% GST if non-pre-packaged, and 12% GST if pre-packaged.

Other Clarifications

ACC Blocks:

ACC blocks containing more than 50% fly ash content will fall under HS 6815 and attract 12% GST.

Pepper and Raisins:

Pepper (fresh green or dried) and raisins supplied by agriculturists are not liable to GST.

Pre-Packaged and Labelled Goods:

Definition amended to cover commodities for retail sale containing not more than 25 kg or 25 litres.

Penal Charges by Banks and NBFCs:

Clarified that no GST is payable on penal charges levied and collected by banks and NBFCs from borrowers for non-compliance with loan terms.

The GST Council's decisions aim to simplify tax compliance and reduce the financial burden on specific goods and services.

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