Recommendations of 54th GST Council Meeting
The 54th GST Council meeting, chaired by the Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman, was held in New Delhi on 9th September 2024. The meeting included Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of several states, and Finance Ministers from other states and UTs. The Council made important recommendations on GST tax rates, compliance improvements, trade facilitation measures, and more.
A. Changes and Clarifications in GST Tax Rates
1. Namkeens and Extruded/Expanded Savory Products
The GST rate for extruded or expanded savory products (excluding un-fried or un-cooked snack pellets) will be reduced from 18% to 12%, aligning with pre-packaged namkeens, bhujia, and similar products. The 5% GST rate will continue for un-fried or un-cooked snack pellets.
2. Cancer Drugs
GST on cancer drugs like Trastuzumab Deruxtecan, Osimertinib, and Durvalumab will be reduced from 12% to 5%.
3. Metal Scrap
A Reverse Charge Mechanism (RCM) will be applied to metal scrap supplied by unregistered persons to registered persons. A TDS of 2% will also be applicable on such supplies in B2B transactions.
4. Air Conditioning Machines for Railways
Roof Mounted Package Unit (RMPU) air conditioning machines for railways will now fall under HSN 8415 and attract 28% GST.
5. Car and Motorcycle Seats
Car seats, classified under 9401, will now attract a GST rate of 28%, aligning with motorcycle seats.
B. Changes in GST Rates for Services
1. Life and Health Insurance
The council recommended that a Group of Ministers (GoM) will be formed to review GST on life and health insurance, with a report expected by October 2024.
2. Transport by Helicopters
A 5% GST rate will be applied to passenger transport by helicopters on a seat-sharing basis. Helicopter charters will continue to attract 18% GST.
3. Flying Training Courses
GST exemptions will apply to approved flying training courses by DGCA-approved Flying Training Organizations (FTOs).
4. Research and Development Services
According to the recommendation of the council, GST will be exempted on R&D services provided by government entities, research associations, universities, and similar institutions funded by government or private grants.
5. Preferential Location Charges (PLC)
PLC for residential/commercial/industrial construction services will be treated as part of the composite supply of construction services and taxed accordingly.
6. Affiliation Services
Affiliation services provided by educational boards like CBSE are taxable, but services offered by state/central boards to government schools will be exempted.
7. Import of Services by Branch Offices
As recommended by the council, the import of services by a foreign airline’s branch office from a related entity or establishment outside India, when done without consideration, will be exempted from GST.
8. Renting Commercial Property
Renting of commercial property by unregistered persons to registered persons will come under RCM to prevent revenue loss.
9. Ancillary Services Provided by GTA
Ancillary services by GTA (Goods Transport Agency) will be treated as part of the composite supply of transport services when invoiced as part of the consignment.
C. Additional Trade Facilitation Measures
1. Waiver of Interest or Penalty
A new rule, Rule 164, will be added to CGST Rules 2017, providing procedures and conditions for waivers of interest or penalties for tax demands under Section 73 for FYs 2017-18, 2018-19, and 2019-20.
2. Mechanism for Input Tax Credit Correction
Special procedures will be introduced to rectify orders for wrong ITC claims where new provisions make the credit eligible.
3. Simplification of IGST Refunds for Exporters
Rule 96(10) of the CGST Rules, which restricted IGST refunds where certain concessions were availed on inputs, will be omitted to simplify refund processes for exporters.
4, Clarifications on Various GST Issues
Circulars will be issued to clarify ambiguities on matters such as the place of supply for advertising and data hosting services, as well as the availability of ITC for demo vehicles.
D. Other Important Announcements
1. B2C E-invoicing Pilot
The GST Council approved a pilot project for B2C e-invoicing in select sectors, aimed at enhancing business efficiency and enabling customers to verify invoice reporting.
2. New Invoice Management System (IMS)
A new Invoice Management System (IMS) will be introduced, allowing taxpayers to manage their invoices for better ITC claims and reducing errors.
These measures from the 54th GST Council meeting reflect ongoing efforts to streamline GST compliance, offer relief to businesses and consumers, and ensure smoother trade processes across India.
To Access the press release of MoF on the recommendations of GST council meeting Click Here
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