Key Highlights and Expectations from the 55th GST Council Meeting

The 55th GST Council meeting has drawn significant attention with its pivotal decisions and reforms. Here's a summary of the key outcomes and anticipated developments from the meeting:

Key Decisions Taken by the GST Council:

A. Exemptions and Clarifications:

• Payment aggregators servicing transactions below ?2,000 received GST exemptions, excluding payment gateways.
• Penal charges by banks and NBFCs on borrowers for non-compliance with loan terms were exempted from GST.
• Agricultural products like dried black pepper and raisins supplied by agriculturists will not attract GST.

B. Rate Revisions and Tax Clarifications:

• Used electric vehicles (EVs) sold between individuals will attract no GST. However, refurbished used EVs sold by businesses will incur 18% GST on margin value.
• Caramelized popcorn, classified as a sugar-added product, will not be taxed at the same rate as salted popcorn (5% GST).
• Compensation cess on supplies to merchant exporters was reduced to 0.1%.

C. Policy Updates:

• Amendments in the CGST Act and Rules focused on improving the Invoice Management System (IMS) for seamless credit management and tax liability adjustments.
• Waiver of late fees for delayed filing of reconciliation statements (2017-2023) was extended until March 31, 2025.

Anticipated Reforms:

• Insurance and Healthcare: Discussions may center around exempting or reducing GST rates on health and life insurance premiums, particularly for senior citizens.
• Inverted Duty Structure: Addressing mismatches in input and output tax rates to resolve cash flow issues for businesses.
• Rate Rationalization: Potential changes in GST rates on tobacco, cosmetics, and high-end goods to curb consumption and boost revenue.

Broader Agenda:

The inclusion of aviation turbine fuel (ATF) under GST, rationalization of compensation cess, and risk-based GST registration are also topics under consideration.

These decisions and expectations underscore the Council's intent to streamline GST policies, promote affordability, and foster business growth.