Key Takeaways: The 54th GST Council meeting decided key rate changes including namkeens down to 12 percent, cancer drugs to 5 percent, car seats up to 28 percent, and RCM on metal scrap. It also announced B2C e-invoicing pilots, new ledgers, interest and penalty waivers, and several trade facilitation clarifications.
Summary of Major Decisions at 54th GST Council Meeting:
- Goods:
– Namkeens and Savoury Products: GST on extruded/expanded savoury food products reduced from 18% to 12%, excluding un-fried/un-cooked snack pellets.
– Cancer Drugs: GST rate reduced from 12% to 5% for Trastuzumab Deruxtecan, Osimertinib, and Durvalumab.
– Metal Scrap: Introduction of Reverse Charge Mechanism (RCM) for metal scrap supplied by unregistered persons to registered persons, with a 2% TDS on supplies by registered persons.
– Railway AC Units: Roof Mounted Package Unit (RMPU) air conditioning machines for railways will attract a 28% GST.
– Car and Motorcycle Seats: GST on car seats increased from 18% to 28% under HSN 9401.
- Services:
– Life and Health Insurance: A Group of Ministers (GoM) will review GST issues related to life and health insurance, with a report expected by October 2024.
– Passenger Transport by Helicopter: GST set at 5% for helicopter passenger transport (seat share) and 18% for charter services.
– Flying Training: GST exemption for approved flying training courses by DGCA-exempted organizations.
– Research & Development Services: Exemption from GST for R&D services provided by Government Entities, universities, or institutions under Section 35 of the Income Tax Act.
– Preferential Location Charges (PLC): PLC for construction services will be considered part of the composite supply of the main construction service.
– Affiliation Services: GST exemption for affiliation services provided by state/central educational boards to government schools; GST at 18% for universities’ affiliation services.
- Other Measures:
– B2C e-Invoicing: Pilot program for B2C e-invoicing to be introduced in selected sectors and states.
– New Ledgers: Introduction of new ledgers including RCM ledger, Input Tax Credit (ITC) Reclaim ledger, and Invoice Management System (IMS).
– Renting Commercial Property: Renting of commercial property by unregistered persons to registered persons now subject to RCM.
– Import Services by Foreign Airlines: Exemption for import services by foreign airline branches in India when conducted without consideration.
– Ancillary Services in Goods Transport: Clarification on the classification of ancillary services by Goods Transport Agencies (GTA) as part of composite supply.
- Trade Facilitation Measures:
– Waiver of Interest/Penalty: New rule 164 and related forms introduced for waiving interest or penalties under section 73 of the CGST Act for FY 2017-18 to 2019-20.
– Section 16 Amendments: Special procedures for rectification of orders and clarifications for taxpayers affected by incorrect input tax credit (ITC) claims under section 16 of the CGST Act.
- GST Clarifications:
– IGST Refunds: Clarifications on IGST refunds for exporters.
– Place of Supply: Guidelines on place of supply for advertising services.
– Demo Vehicle ITC: Clarifications on Input Tax Credit for demo vehicles.
– Data Hosting Services: Updates on GST treatment of data hosting services.
– Film Distributors’ Liability: GST for film distributors to be regularized on an “as is where is” basis for past periods.
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