GST 55th Council Meeting

As all of us are aware we directly or indirectly participate in the tax regime of the country. 

The Goods and Services Act was implemented on 1 July 2017 by the Government of India. It can be found in Article 269 A of the Indian Constitution which thereby states here. 

(1)    According to Article 269 A of the Indian constitution all the goods and services regarding inter-state trade and commerce shall be collected by the Indian government and shall be allocated between union and states as per parliament on recommendation by the council.

Making special provisions for the following states: Uttarakhand Meghalaya, Assam, Manipur, Mizoram, Sikkim, Tripura, Jammu and Kashmir, Himachal Pradesh, Nagaland and Arunachal Pradesh.

GST Council’s 55th meeting –

Instead of the Goods and Services Act, the GST council conducts discussions every year to introduce reforms in the tax regime of our country.

Recently the GST council held its 55th meeting on 21 December, 2024. This meeting was held under the superintendency of the minister of corporate affairs and finance minister Mrs. Nirmala Sitharaman. 

The meeting took some key decisions that help in the future vision of the economy and impact the day-to-day making of financial decisions of individuals and corporate houses.  

Key changes that are made –

Exemptions and Reductions

•    Full exemption on GST on gene therapy

•    Exemption of GST on contributions by general insurance companies from third-party motor vehicle premiums for Motor Vehicle Accident Fund

•    No GST on transaction of vouchers – 

Clarification – It has been clarified that transaction vouchers are neither a part of the supply of goods nor a supply of services. The provisions related to vouchers are also being simplified.

•    No GST is payable on ‘penal charges’ levied and collected by banks and NBFCs from borrowers for non-compliance with loan terms.

•    Reduction of payment of pre-deposit for filing an appeal before the Appellate Authority in respect of an order passed which involves only penalty amount

•    Reduction in GST rate on Fortified Rice Kernel (FRK), classifiable under 1904, to 5%

Deferred Decisions

•    Health Insurance GST: The Group of Ministers (GoM) requires more time to finalize inputs from insurance regulators regarding a potential reduction in GST on premiums.

•    Aviation Turbine Fuel (ATF): States were not comfortable including ATF under GST, and it will remain outside its purview.

•    Quick Commerce and Food Delivery Apps: The Council discussed the imposition of GST on platforms like e-commerce and food delivery apps but deferred taking a decision.

•    Floor Space Index (FSI): The majority felt the issue impacts municipal and state revenues, so no conclusion was reached.

Cinema Halls

•    An interesting clarification was made regarding the sale of caramelised popcorn in theatres. The finance minister clarified that when these popcorns are mixed with sugar it changes its character to sugar confectionery, thereby it would attract an 18% GST.

The way forward – 

•    The finance minister also advised people to not make any prior assumptions regarding the deferment and imposition of GST on services.

•    It is advised to stay updated and keep the clarifications made by the council in mind to be more financially aware. 

Author:

Disha Chauhan
Delhi, India
Campus Law Centre, University of Delhi, Final Year Law