Highlights from the 55th GST Council Meeting: Updates, Outcomes, Press Release, and Latest News
Key Updates from the 55th GST Council Meeting
In this post, we will discuss the key highlights and updates from the 55th GST Council Meeting, including decisions on tax exemptions, rate changes, and clarifications that impact businesses and consumers. Let us look at these sections:
Highlights of the 55th GST Council Meeting
The following are the main decisions made during the meeting:
- Extension for Group of Ministers (GoM):
The GoM is given more time to provide reports on issues like compensation cess, rate rationalisation, and health insurance. - GST Exemption for Small Transactions via Payment Aggregators:
Payment aggregators that process payments below ₹2,000 are now GST-exempt. But this exception does not apply to payment gateways or fintech services that handle fund settlements. - No GST on Penal Charges by Banks and NBFCs:
Penalties received from borrowers for breaking loan terms will not be subject to GST. - Agricultural Supplies Exempted:
Agriculturists can now sell dried black pepper and raisins without paying GST. - Caramelised Popcorn Tax Rate Clarified:
Caramelised popcorn will be taxed more due to the additional sugar than salted popcorn, which is taxed at only 5% as a “namkeen.” - Pending Decision on GST for Food Delivery Services:
The GST Council has postponed discussions on GST rates for food products as well as delivery charges via food delivery apps and e-commerce platforms. - Tax Clarification on Used Electric Vehicles (EVs):
- No GST is charged when one person sells a used electric vehicle to another.
- Like used vehicles, businesses selling refurbished old EVs must pay 18% GST on the margin value (sale price minus purchase price).
- Reduced Compensation Cess for Merchant Exporters:
Supplies to merchant exporters will be subject to a 0.1% compensation cess, which is the same as the GST rate. - IGST Exemption for IAEA Inspection Equipment:
Imported equipment and consumable samples for the International Atomic Energy Agency (IAEA) inspection teams will be GST-free, according to certain conditions.
These updates reflect the Council’s continued focus on rationalising GST structures and providing clarity on critical issues.
Key Changes After the 55th GST Council Meeting
The following is a summary of the items and services that have been cheaper, costlier, or clarified following the most recent GST Council decisions:
| S.No | Goods/Services | HSN/SAC Code | Current Rate | New Rate | Impact |
| 1 | Fortified rice kernels | 1904 | 18% | 5% | Cheaper |
| 2 | Gene therapy for life-threatening diseases | – | Taxable | Exempted | Cheaper |
| 3 | Food items for free distribution under government programs | 19 or 21 | Taxed higher due to lack of clarity | 5% | Cheaper |
| 4 | ACC blocks (concrete) with over 50% fly ash content | 6815 | 5% | 12% | Costlier |
| 5 | Fresh/dried black pepper or raisins supplied by agriculturists | 0904 | 5% | No GST | Cheaper |
| 6 | Services by NSDC-approved skill training partners | 9992 | 18% | Exempted | Cheaper |
| 7 | Sale of used Electric Vehicles (EV) between individuals | – | Taxed higher due to lack of clarity | 5% | Clarified |
| 8 | Sale of refurbished EVs by businesses | – | 12% | 18% on profit | Clarified |
| 9 | Sub-systems for Long Range Surface to Air Missiles (LRSAM) | 9023 | Taxable | Exempted | Cheaper |
| 10 | Penal charges by banks/NBFCs for loan defaults | – | Taxed due to lack of clarity | Exempted | Clarified |
This table highlights key changes in tax rates and their effects, making it simpler to understand the implications for businesses and consumers.
Key Clarifications by the GST Council
1. Updates for the Invoice Management System (IMS):
- GSTR-2B Generation: Section 38 of the CGST Act and Rule 60 of the CGST Rules will be changed to legally support the creation of FORM GSTR-2B based on taxpayer actions within the IMS.
- Credit Note Adjustments: Section 34(2) will be changed to allow recipients to reverse input tax credit (ITC) based on a credit note, allowing suppliers to lower their output tax burden.
- New Rule 67B: A new rule will define how suppliers can reconcile their production tax due with credit notes issued.
- GSTR-3B Filing: Amendments to Section 39(1) and Rule 61 will require FORM GSTR-3B for a tax period to be filed only after FORM GSTR-2B for the same period is published on the GST site.
2. Clarification about late fees for GSTR-9 and GSTR-9C filing:
- A circular will clarify the late charge charged under Section 47(2) of the CGST Act for late submission of the annual return (FORM GSTR-9) and reconciliation statement (FORM GSTR-9C).
3. Late Fee Waiver for GSTR-9C (2017-2018 to 2022-23):
- A notification under Section 128 of the CGST Act would waive late penalties for FORM GSTR-9C filings that are delayed from 2017-18 to 2022-23.
- This waiver applies if FORM GSTR-9C is filed before March 31, 2025, with any excess late costs (beyond what was payable before filing FORM GSTR-9) waived.
4. Reduction in the Appeals Pre-Deposit:
- The pre-deposit will be lowered to 10% for appeals that involve penalties and no tax demands.
- This will involve changes to Section 107(6) and a new provision in Section 112(8) of the CGST Act for appeals to the Appellate Tribunal.
These changes are intended to simplify GST compliance, minimize penalties, and make the system more taxpayer-friendly.
Press Release for the 55th GST Council Meeting
The Finance Ministry issued an official press release highlighting important discussions and outcomes from the 55th GST Council Meeting, which took place on December 21, 2024.
[Download the complete press release here]
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