In the 53rd GST Council Meeting held on 22-06-2024, Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs announced various substantial initiatives to tackle matters to tax amendments, Aadhaar integration, and exemption in railway and hostel services.
Article 279-A(1) of the Constitution of India
Article 279-A(1) of the Constitution mandates the establishment of the Goods and Services Tax Council (GST Council) by Presidential Order. This Council, formed within 60 days of the Constitution (One Hundred and First Amendment) Act, 2016, assumes a critical role in overseeing the implementation and administration of the Goods and Services Tax.
The key highlights are as follows:
Aadhaar-Based Biometric Verification: A biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner will be rolled out. This was porposed to combat fake invoice scamsd. This will make it harder to claim fraudulent tax credits.
Uniform GST for Milk Cans: The GST Council recommended a standardized 12% GST rate for all milk cans, regardless of the material composition (steel, iron, or aluminium). This streamlines the tax treatment for milk can purchases within the dairy industry.
Uniform Fuel Tax: GST for Petrol & Diesel Under Consideration: The Government has reaffirmed its intention to include petrol and diesel under the Goods and Services Tax (GST) regime. This move awaits agreement from states on a standardized tax rate for these fuels. The implementation of GST for petrol and diesel is expected to establish a uniform taxation system across the country.
Indian Railways Services to Become More Affordable: There will be an exemption on platform tickets from the Goods and Services Tax (GST). This move aims to make train travel more accessible for passengers.
Streamlined Tax for Aircraft Maintenance: A single, reduced IGST rate of 5% will now apply to all imported aircraft parts, components, testing equipment, tools, and toolkits, regardless of their prior classification. This aims to streamline and incentivize Maintenance, Repair, and Overhaul (MRO) activities in the aviation sector.
Cost Reduction for Packaging: The tax rate on all carton boxes will be lowered from 18% to 12%. This reduction aims to stimulate the economy by lowering production costs for manufacturers who rely on carton boxes. Additionally, consumers are expected to benefit from potentially lower prices on packaged goods.
Making Hostels More Affordable: An exemption on Goods and Services Tax (GST) has been introduced for hostel accommodation charges, up to ₹20,000 per person per month. This applies to hostels outside educational institutions, making them more affordable for working professionals and other long-term residents.
Extension of GSTR-4 Filing Deadline for FY 2024-25 Onwards: In a move to provide relief to small businesses, the Council has extended the deadline for filing GSTR 4 tax returns. Previously due on 30-04-2024, the filing date has been shifted to 30-06-2024. This change applies to returns for the financial year 2024-25 onwards.
Interest and Penalty Relief in non-fraudulent cases: Waiver of interest and penalties for demand notices issued under Section 73 of the GST Act in cases not involving fraud, suppression, or misstatements.
New Thresholds for Appealing GST Decisions: The GST Council has additionally made recommendations to set monetary thresholds for the filing of appeals by the department in various courts. The monetary limit that has been recommended to be set is ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for the High Court, and ₹2 crore for the Supreme Court.
Input Tax Credit (ITC): For taxpayers who filed GST returns by 30-11-2021, the deadline to claim Input Tax Credit (ITC) on invoices and debit notes for financial years 2017-18 to 2020-21 has been deemed to be 30-11-2021.
Reduced pre-deposit amount for GST Appeals: To ease the cash flow, the pre-deposit amount for GST Appeals has been reduced to Rs. 20 Crores CGST and SGST.
Period to file an appeal: The council has recommended to amend the CGST Act to start the three-month period for GST Appellate Tribunal appeals from a notified date.
Zero interest burden: No interest is to be levied on delayed return filing if the amount is available in the Electronic Cash Ledger on the due date.
Sunset clause for anti-profiteering: The Sunset clause is to be applicable from April 1, 2025, for new Anti-profiteering applications.
TCS rate reduction by Electronic Commerce Operators (ECOs): To ease the financial burden on suppliers, TCS rates have been reduced from 1% to 0.5%.
Exemption on Extra-neutral Alcohol: The council also recommended an amendment to exclude Extra-neutral Alcohol from the GST when it is being used for the manufacturing of alcoholic liquor.
Export duty cases: The council additionally made recommendations to restrict the refund of IGST in cases where the export duty is payable.
Threshold for B2C inter-state supplies, reduced: The threshold has been reduced from Rs. 2.5 lakhs to Rs. 1 lakh for reporting B2C inter-State supplies invoice-wise in FORM GSTR-1.
Filing the GSTR-7 monthly: GSTR-7 needs to be filed monthly by TDS deductors without a late fee for delay in filing of Nil returns.
Co-insurance and Reinsurance: Premiums and commissions for both co-insurance and reinsurance are now considered non-taxable supplies under Schedule III. This applies to past cases as well, allowing for regularization.
GST on Reinsurance Services: For specific insurance schemes, GST on reinsurance services will be regularized based on the current situation (as is where is).
Retrocession: The definition of retrocession (reinsurance of reinsurance) is clarified, and it qualifies for GST exemption.
RERA Collections: Collections by the Real Estate Regulatory Authority (RERA) are exempt from GST under Notification No. 12/2017-CTR, Entry 4.
RuPay Debit Cards: Incentive sharing between NPCI and banks for RuPay debit cards is not subject to GST.
GST Relief for Ministry of Defence: The supply of aerated beverages and energy drinks to canteens run by the Indian Ministry of Defence is now exempt from GST. Additionally, ad hoc IGST exemptions have been granted for technical documentation accompanying AK-203 rifle kits imported for the Indian Defence forces.
Uniform GST on Solar Cookers: The GST Council recommends a standardized rate of twelve percent (12%) for all solar cookers, regardless of whether they utilize a single or dual energy source.
Uniform GST Treatment for Sprinkler Systems: A consistent Goods and Services Tax rate of twelve percent (12%) has been proposed by the GST Council for all categories of sprinkler equipment, including those used for fire and water usage.
Imports:
Extended Tax Exemption for Defense Equipment: The import of specified defense items will continue to be exempt from IGST (Integrated Goods and Services Tax) until June 30th, 2029.
Tax Relief for Research Equipment: Imports of research equipment and buoys under the RAMA program will now be exempt from IGST.
Compensation Cess Exemption for SEZs: SEZ (Special Economic Zone) units and developers can now claim a compensation cess exemption on their imports made since 1-07–2017.
it would have been a better facility had the exemptions given for processing charges of agricultural produces.
Shivashankar