The 50th Meeting of the GST Council, led by Union Finance & Corporate Affairs Minister Nirmala Sitharaman, marked a significant milestone in the journey of Goods and Services Tax (GST). The council discussed and recommended changes in GST tax rates, measures to facilitate trade, and streamline compliance processes. Here are the key highlights of the meeting.
Changes in GST Tax Rates:
I. Recommendations relating to GST rates on Goods:
A. Changes in GST rates of goods:
- Uncooked/Unfried Snack Pellets: The rate on uncooked/unfried snack pellets will be reduced to 5%, and payment of GST for past periods will be regularized.
B. Other changes relating to goods:
Dinutuximab (Quarziba) Medicine: IGST exemption will be provided for imported Dinutuximab (Quarziba) medicine for personal use.
Medicines and Food for Special Medical Purposes (FSMP): IGST exemption will be extended to imported medicines and FSMP used in the treatment of rare diseases listed under the National Policy for Rare Diseases, subject to existing conditions. The exemption will also apply to FSMP imported by Centers of Excellence for Rare Diseases or recommended institutions.
Supply of Raw Cotton: Supply of raw cotton, including kala cotton, by agriculturists to cooperatives will be taxable under reverse charge mechanism, and issues related to past periods will be regularized.
Imitation Zari Thread or Yarn: GST rate on imitation zari thread or yarn will be reduced from 12% to 5%, and payment of GST for past periods will be regularized.
Utility Vehicles: Entry 52B in the compensation cess notification will be amended to include all utility vehicles that meet specified parameters. The ground clearance in unladen condition will be clarified.
LD Slag: GST rate on LD slag will be reduced from 18% to 5% to promote better utilization and environmental protection.
Implants: Issues relating to trauma, spine, and arthroplasty implants prior to 18.07.2022 will be regularized due to genuine interpretational issues.
- Fish Soluble Paste: GST rate on fish soluble paste will be reduced from 18% to 5%, and payment of GST for past periods will be regularized.
- Desiccated Coconut: Issues relating to desiccated coconut for the period 1.7.2017 to 27.7.2017 will be regularized due to genuine interpretational issues.
Pan Masala and Tobacco Products: The earlier ad valorem rate applicable on 31st March 2023 will be notified for the levy of Compensation Cess on pan masala, tobacco products, etc., where it is not legally required to declare the retail sale price.
Banks for IGST Exemption: RBL Bank and ICBC Bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum. The list of eligible banks/entities will be updated as per the Foreign Trade Policy 2023.
- Notifications: Consequential changes will be made in notifications in accordance with the new Foreign Trade Policy 2023.
- Plates and Cups made of Areca Leaves: Issues relating to GST on plates and cups made of areca leaves prior to 01.10.2019 will be regularized.
Biomass Briquettes: Issues relating to GST on biomass briquettes for the period 01.7.2017 to 12.10.2017 will be regularized.
Table 1: Changes in GST Tax Rates for Goods
|S. No.||Goods/Items||GST Rate Before Recommendation||Recommended GST Rate||Regularization of Past Payment|
|1.||Uncooked/Unfried Snack Pellets||18%||5%||“As is basis”|
|2.||Dinutuximab (Quarziba) Medicine||–||Exempt||–|
|3.||Medicines and FSMP for Rare Diseases||–||Exempt||–|
|4.||Raw Cotton (including kala cotton)||–||Taxable (under RCM)||“As is basis”|
|5.||Imitation Zari Thread or Yarn||12%||5%||“As is basis”|
|8.||Trauma, Spine, and Arthroplasty Implants||–||–||“As is basis”|
|9.||Fish Soluble Paste||18%||5%||“As is basis”|
|10.||Desiccated Coconut||–||–||“As is basis”|
|11.||Pan Masala and Tobacco Products||–||–||–|
|12.||Banks for IGST Exemption on Gold/Silver/Plat||–||–||–|
|14.||Plates and Cups made of Areca Leaves||–||–||“As is basis”|
|15.||Biomass Briquettes||–||–||“As is basis”|
II. Recommendations relating to GST rates on Services:
A. Changes in GST rates of services:
- Satellite Launch Services: GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) may be extended to such services supplied by private sector organizations to encourage startups.
B. Other changes relating to services:
Goods Transport Agencies (GTAs): GTAs will not be required to file a declaration for paying GST under forward charge every year. The option to pay GST under forward charge must be exercised by 31st March of the preceding financial year.
- Services Provided by Directors: Services provided by a director of a company in his private or personal capacity, such as renting immovable property, will not be taxable under reverse charge mechanism (RCM). Only services supplied by a director in their capacity as a director of the company or body corporate will be taxable under RCM.
Food and Beverages in Cinema Halls: Supply of food and beverages in cinema halls will be taxable as a restaurant service if supplied independently of the cinema exhibition service.
Table 2: Changes in GST Rates for Services
|S. No.||Services||GST Rate Before Recommendation||Recommended GST Rate|
|1.||Satellite Launch Services||–||Exempt (extended to private sector)|
|2.||Goods Transport Agencies (GTAs)||–||–|
|3.||Services Provided by Directors||–||–|
|4.||Food and Beverages in Cinema Halls||–||–|
III. Second Report of Group of Ministers (GoM) on Casinos, Race Courses, and Online Gaming:
The GoM recommended taxing casinos, horse racing, and online gaming at a uniform rate of 28%, with tax applicable on the face value of chips purchased in the case of casinos, the full value of bets placed with bookmakers/totalisator in the case of horse racing, and the full value of bets placed in the case of online gaming.
Table 3: Second Report of GoM on Casinos, Race Courses, and Online Gaming
|S. No.||Activities||Current GST Rate||Recommended GST Rate|