The 54th GST Council meeting was held on September 9th, 2024, in Delhi. Union Finance & Corporate Affairs Minister Nirmala Sitharaman led it. This meeting had key updates and decisions for taxpayers. It’s vital to know about the gst council 54th meeting 09.09.2024 to follow the rules and use the relief offered.
The GST Council talked about many things. This includes GST rates, exemptions, reverse charge, and service rules. They also discussed procedural updates. While no big decisions were made, there were some highlights. For example, the tax on cancer drugs and namkeen was lowered.
It’s crucial for businesses and individuals to understand the GST Council’s decisions. Keeping up with GST news helps your business stay compliant and benefit from changes. If you’re new to GST, learning about the GST registration process is key to avoid legal issues.
Key Takeaways
- Revenue from online gaming increased by 412% to Rs. 6,909 crores in 6 months
- GST rate on cancer drugs reduced from 12% to 5%
- Flying training courses conducted by DGCA-approved institutions exempted from GST
- Reverse Charge Mechanism introduced for supply of metal scrap by unregistered persons
- New GST invoice management system to be implemented from October 1st, 2024
Key Decisions of the 54th GST Council Meeting
The 54th GST Council Meeting was a big event, led by Finance Minister Nirmala Sitharaman on September 9, 2024, in New Delhi. It had many important gst meeting updates and decisions. These changes will affect many parts of the Indian economy.
Changes in GST Rates on Goods and Services
The Council decided to lower GST rates for many goods and services. Namkeen, or extruded or expanded savoury snacks, will now have a 12% GST rate, down from 18%. Cancer drugs like Trastuzumab Deruxtecan, Osimertinib, and Durvalumab will see their GST rate drop to 5% from 12%. This will help make medicines more affordable for people.
But, the Council also voted to raise GST on car seats to 28% from 18%. Helicopter services for sharing will now have a 5% GST.
Exemptions from GST on Services
The meeting offered relief to many sectors by exempting them from GST. Now, research and development grants to educational institutions won’t have GST. Foreign airlines can import services without GST if they don’t pay for them.
“Application fees, connection rental charges, and other services incidental to the supply of electricity by transmission and distribution utilities to their consumers will be treated as a composite supply and exempted.”
This change is good news for the real estate sector and others that use a lot of electricity.
Introduction of Reverse Charge Mechanism on Metal Scrap
The Council introduced a new rule for metal scrap sales from unregistered to registered sellers. There will be a 2% TDS on B2B deals. Renting commercial spaces by unregistered to registered parties will also be taxed.
| Commodity | Previous GST Rate | New GST Rate |
|---|---|---|
| Namkeen (Extruded or Expanded Savoury Snacks) | 18% | 12% |
| Cancer Drugs (Trastuzumab Deruxtecan, Osimertinib, Durvalumab) | 12% | 5% |
| Car Seats | 18% | 28% |
| Helicopter Services (On Sharing Basis) | – | 5% |
The changes from the 54th GST Council Meeting will greatly affect businesses and consumers. As these decisions take effect, it’s important for everyone to keep up with the latest news and adjust accordingly.
Clarifications on Applicability of GST for Various Services
The 54th GST Council meeting on September 9, 2024, made important updates on GST on services. It brought clear answers on several topics, making the GST system in India better. Let’s look at the main points from the meeting about GST on services.
Flying Training Courses
The GST Council said that flying training courses by DGCA-approved Flying Training Organizations (FTOs) don’t have GST. This is good news for pilots and the aviation world. It means students won’t pay as much for their training.
Preferential Location Charges (PLC)
Now, Preferential Location Charges (PLC) are part of construction services as a single package. This means PLC gets the same tax treatment as the main construction work. This change makes taxes clearer for the real estate industry.
| Service | Previous GST Treatment | Updated GST Treatment |
|---|---|---|
| Preferential Location Charges (PLC) | Separate from construction services | Bundled with construction services as a composite supply |
Affiliation Services
The GST Council made it clear how to tax affiliation services:
- Affiliation services by educational boards like CBSE are taxed.
- Affiliation services by State/Central boards and councils to Government Schools are now exempt.
- Affiliation services by universities to their colleges are taxed.
These changes make GST on affiliation services in education fairer and more consistent.
The council also looked at services linked to transportation. Services like loading/unloading, packing/unpacking, transshipment, and temporary warehousing by a Goods Transport Agency (GTA) are part of a single service if the GTA gives a consignment note. But if invoiced separately, they’re not considered a single transport service.
The 54th GST Council meeting showed the government’s effort to make GST easier and friendlier for businesses. Meetings like this are key in solving issues, clearing up confusion, and making the tax system better in India.
GST Council 54th Meeting 09.09.2024 Highlights
The 54th GST Council meeting was held on today i.e. September 9, 2024. It brought about big changes and updates to GST rates and rules. The meeting aimed to address industry concerns and help consumers in some sectors. Let’s look at the main points from the meeting.
Reduced GST Rates on Cancer Drugs
The GST Council decided to lower GST rates on cancer drugs to make treatment cheaper. Now, Trastuzumab Deruxtecan, Osimertinib, and Durvalumab will have a 5% GST rate, down from 12%. This change will help cancer patients and their families by making these crucial drugs more affordable.
GST Rate Changes for Car and Motorcycle Seats
The council looked into the different GST rates for car and motorcycle seats. Car seats were taxed at 18%, while motorcycle seats had a 28% rate. To fix this, the council raised the GST on car seats to 28%, matching motorcycle seats. This change will start soon.
| Item | Previous GST Rate | New GST Rate |
|---|---|---|
| Car Seats | 18% | 28% |
| Motorcycle Seats | 28% | 28% |
E-Invoicing for B2C Transactions on Pilot Basis
The council suggested starting e-invoicing for B2C sales on a trial basis. Before, e-invoicing was needed for B2B sales over Rs. 5 crore. Now, e-invoices for B2C sales will go through a special portal. This move aims to make invoicing smoother and stop fake invoicing in B2C sales.
Starting e-invoicing for B2C sales is a big step towards making things clearer and stopping fake invoicing in retail.
The 54th GST Council meeting made several important changes. Lowering GST on cancer drugs will help patients a lot. Making GST rates for car and motorcycle seats the same is also a big step. And starting e-invoicing for B2C sales will help fight fake invoicing and increase openness in retail. As these changes take effect, businesses and consumers need to keep up and follow the new GST rules.
Procedural Updates and Refund Related Issues
The 54th GST Council meeting on 9th September 2024 made big changes. It aimed to make the GST system work better. The Council added Rule 164 to CGST Rules, 2017, and some forms. This rule helps taxpayers get relief from interest or penalty.
Exporters got a big win with this meeting. The Council said IGST refunds on exports won’t break Rule 96(10) of CGST Rules. This is if the exporter paid IGST and interest later. This change should make refunds easier for exporters.
The Council also made the export refund process simpler. They suggested removing Rule 96(10), Rule 89(4A), and Rule 89(4B) from CGST Rules, 2017. This will lessen the burden on exporters and speed up refund claims.
The GST Council also clarified how to apply for input tax credit. This is under sub-sections (5) and (6) of Section 16 of the CGST Act, 2017.
A new process was set up for fixing mistakes in orders. This applies to orders about wrong input tax credit claims. It will help taxpayers fix errors without going to court.
The meeting also covered these refund issues:
- Extended the time to issue orders under Section 79 until certain dates for FY 2017-18, 2018-19, and 2019-20
- Waived late fees for filing GSTR-4 for FY 2021-22 from 1st May to 30th June 2022
- Introduced amnesty schemes for late filers and defaulters by 30th June 2023
These steps show the GST Council’s effort to help taxpayers. They aim to make the GST system work better. As GST changes, these updates will help businesses and taxpayers.
Formation of New Group of Ministers (GoMs)
At the 54th GST Council meeting, two new Group of Ministers (GoMs) were created. They will tackle key GST issues. The first GoM will look into medical and health insurance. The second will discuss how to use compensation cess after March 2025. These changes show the government’s effort to make GST better and last longer.
GoM on Medical and Health Insurance
The GST Council has expanded the GoM on rate rationalization. It added new members to focus on medical and health insurance. This group must give a report by the end of October 2024. For now, the GST Council has kept the GST rate on life and health insurance at 18%. Any changes will wait until the next meeting in November.
“The formation of the GoM on medical and health insurance is a step in the right direction. It will help in addressing the concerns of the industry and ensure that the GST rates are in line with the overall objectives of the GST system.”
GoM on Utilization of Compensation Cess Post March 2025
A second GoM was set up to figure out how to use compensation cess after March 2025. Last June, the government extended the compensation cess on luxury and demerit goods until March 2026. The goal is to pay back loans and interest by January 2026.
| Particulars | Amount (in Rs. crores) |
|---|---|
| Total cess collection (actual + projected) up to March 2025 | 8,66,706 |
| Compensation paid till 5th September 2024 | 6,64,203 |
| Back-to-back loans repayable | 2,69,208 |
| Interest on loans | 51,561 |
The GST Council decided to create a GoM to look into these numbers. This is key for the future of the compensation cess. It will affect the GST system and the money both the central and state governments make.
- The GoM on compensation cess utilization is a good move. It will clear up how the cess will be used and its effect on the GST system.
- The GST Council’s choices to set up these GoMs show it’s actively working on GST challenges. It aims to make sure GST works well for a long time.
Conclusion
The 54th GST Council meeting, led by Finance Minister Nirmala Sitharaman on September 9, 2024, made key updates and decisions. It changed GST rates for many goods and services. For example, it lowered the GST on namkeens and savory snacks from 18% to 12%. It also cut the GST on some cancer drugs like Trastuzumab Deruxtecan from 12% to 5%.
The council introduced a Reverse Charge Mechanism for metal scrap supplies. It also made it clear that GST applies to services like flying training courses and preferential location charges.
Other major decisions included raising the GST on car seats to match motorcycle seats at 28%. There was talk of lowering health and life insurance premiums from 18% to 5%. A 5% GST was set on helicopter passenger rides on a seat-sharing basis.
The meeting also covered updates on procedures, refund issues, and the creation of a new Group of Ministers. They will look into using compensation cess after March 2025.
These updates from the 54th GST Council meeting will bring big changes for businesses and consumers. The full press release is on the official website. It gives more details on the decisions and their effects. Keeping up with the latest from the GST Council is key for handling the changing tax scene in India.
FAQ
Q: What were the key decisions made in the 54th GST Council meeting?
A: The 54th GST Council meeting made several key decisions. These include changes in GST rates for goods and services. They also decided on exemptions for certain services, a new rule for metal scrap, and clarified service applicability. There were updates on procedures and issues related to refunds.
Q: What changes were made to GST rates on goods and services?
A: The GST Council cut GST rates on essential cancer drugs to 5% from 12%. Car seats now have a 28% GST rate, the same as motorcycle seats. GST on extruded or expanded savoury snacks (namkeen) was reduced to 12% from 18%.
Q: What exemptions from GST on services were announced?
A: Research and development grants to educational institutions are now GST-free. Foreign airlines can import services without GST if there’s no payment. Electricity services by utilities to consumers are also exempt as a composite supply.
Q: What clarifications were provided on the applicability of GST for various services?
A: The Council said flying training by DGCA-approved FTOs is GST-free. Construction services with Preferential Location Charges are treated as a single supply. This means they get the same tax treatment. Educational boards’ affiliation services to government schools are now exempt.
Q: What procedural updates and refund related issues were addressed in the meeting?
A: The Council suggested adding a rule for GST refunds on exports. It clarified that refunds aren’t a violation of rules if exporters paid IGST and interest later.
Q: What new Group of Ministers (GoMs) were formed during the 54th GST Council meeting?
A: Two new GoMs were set up – one for medical and health insurance, and another for using compensation cess after March 2025. The health insurance GoM is an extension of the rate rationalization group. It must report by the end of October 2024.
