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Key Takeaways From the 53rd GST Council Meeting

During the 53rd GST Council Meeting on Saturday, June 22, 2024, Finance Minister Nirmala Sitharaman revealed numerous important initiatives. The meeting, led by Sitharaman and joined by state finance ministers, centered on changes in taxes, integration of Aadhaar biometrics, and exemptions in railway services.

Here are the main points to remember:

Petrol & Diesel Under the Ambit of GST

The central government restated its intention to include petrol and diesel in the GST system, awaiting agreement from states on the appropriate tax rate. This action is viewed as a move toward standardising fuel taxation nationwide under 53rd GST Council Meeting.

Railway Services

The council approved a GST exemption for platform tickets to alleviate the financial burden on passengers. This choice is a component of larger initiatives to increase the affordability of railway services.

Deduction of GST for Carton Boxes

There has been a deduction of the GST on the carton boxes from 18% to 12%. This particular change intends to benefit both consumers and manufacturers by lowering the overall cost of these essential packaging materials.

Exemption for the hostel Accommodation

GST exemption was provided for services related to hostel accommodation outside educational institutions, with a maximum limit of ₹20,000 per person per month. This exception aims to lower the cost of hostel stays for residents who are not students.

Conditional Loans & Central Support to States

In her speech, Finance Minister Sitharaman stressed the Union Government’s dedication to supporting states by providing timely tax devolution, Finance Commission grants, and GST compensation settlements.

She emphasized the importance of the Scheme for Special Assistance to States for Capital Investment, explaining that although the majority of loans are not subject to restrictions, some are dependent on states carrying out citizen-focused reforms and designated capital projects in different areas.

Sitharaman urged states to make use of these loans by meeting the specified requirements.

Deadline Extension for GSTR 4 Filing for Taxpayers

To assist small taxpayers, the Council proposed to increase the deadline for submitting details and returns in form GSTR 4 from April 30th to June 30th. The minister mentioned that this will be applicable for returns starting from the Financial Year 2024-25. It’s important for small taxpayers to file GST Return on time.

Waiver on the Interest & Penalties for Non-fraudulent Cases

The GST Council, as per Finance Minister Nirmala Sitharaman’s announcement, has suggested eliminating interest and penalties for demand notices under Section 73 of the GST Act. This exemption is for situations that do not include fraud, suppression, or misstatements.

New Set Monetary Limits for Filing Appeals

In the 53rd GST Council Meeting, The FM Nirmala Sitharaman also mentioned that the GST Council has proposed establishing financial limits for submitting appeals by the department in different courts.

She stated that to decrease government litigation, the council suggested setting a monetary cap of ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for the High Court, and ₹2 crore for the Supreme Court for department appeals.

Biometric Authentication AADHAR Based

Biometric-based Aadhaar authentication will be implemented nationwide in India. This will assist in tackling false claims for input tax credits through bogus invoices in the cases highlighted by Finance Minister Nirmala Sitharaman.

This project is focused on improving tax compliance by reducing fraudulent activities like creating fake invoices.

What are the Changes in the GST Rates for the Goods?

There have been changes made in the GST rates for the goods such as:

Parts & Tools for Aircraft

Imported parts, components, testing equipment, tools, and toolkits of aircraft are subject to a 5% IGST.

Solar Cookers

12% goods and services tax applies to both single and dual-energy source solar cookers.

Sprinklers

12% GST applies to all varieties of sprinklers, including fire water sprinklers.

What are the Changes in Measure for Facilitation of Trade?

There are the changes made in the measure for facilitation of trade under GST such as:

Deduction in TCS Rates by E-commerce Operators

The deducted Tax Collected at Source rates from 1% to 0.5% to ease the financial burden on the suppliers getting used to e-commerce platforms. It’s an excellent move under 53rd GST Council Meeting.

Amendment under the Rule-88B of CGST Rules

Revise Rule 88B so that the calculation of interest under Section 50 of the CGST Act for late returns does not include funds in the Electronic Cash Ledger.

Inserting Section-11A in the CGST Act

Introduce Section 11A to legitimize occurrences of GST not being fully imposed or being under-imposed due to typical business practices, as suggested by the Council.

Input Services for Transitional Credit

Revise Section 140(7) of the CGST Act to permit Input Service Distributors to claim transitional credit for input services obtained before the appointed date.

GST Demand Notice Uniform Time Limit

Introduce a standardized timeline for sending demand notices and orders as per Sections-73, 74, and 74A of the CGST Act starting in the financial year 2024-25, simplifying compliance.

Reduction in the Threshold Limit for B2B Interstate Supplies

Reduce the minimum amount required for reporting B2C inter-state supplies on individual invoices in FORM GSTR-1 below Rs.2.5 Lakh to Rs.1 Lakh, improving efficiency in reporting.

Conclusion

The primary focus of the 53rd GST Council Meeting was on improving procedures, adding compliance using technology, and modifying tax rates to assist crucial industries such as healthcare and renewable energy. The goal was to promote collaboration between states and guarantee a fair distribution of revenue among them. Through collaborating with stakeholders, the Council is guiding the GST system towards rising efficiency, transparency, and economic growth.