The 55th GST Council Meeting held on December 21, 2024, in Jaisalmer, introduced key decisions to enhance India’s GST framework, focusing on compliance, tax rate adjustments, and exemptions. Attended by Union and State Finance Ministers, Chief Ministers, and senior officials, the council approved IGST settlements and initiated GST Appellate Tribunal rules. The Group of Ministers on GST compensation restructuring received an extension until June 2025. A new group was formed to design a standard natural disaster levy, following Andhra Pradesh’s proposal.
What Became Cheaper and Costlier After the 55th GST Council Meeting?
| S.No | Product | Recommended rate | Result |
| 1 | Fortified rice Kernels | From 18% to 5% | Decline in % ; cheaper |
| 2 | Gene therapy to treat life threatening diseases Sub-systems of long range surface to air missiles and similar software’s Bank/Non-banking financial companies (NBFCs) penal charges for loan defaults Transactions involving vouchers On payment aggregators processing payments under rs. 2000/- Import of equipment and consumable samples by the International Atomic Energy Agency for inspection | From Taxable to Exempted | Cheaper |
| 3 | Food products going for free distribution to weaker section under a government scheme | 5% | Cheaper |
| 4 | ACC blocks (concrete) containing more than 50% fly ash content | From 5% to 12% | Costlier |
| 5 | Black pepper/ raisins ~ supplied by agriculturalist | From 5% to no GST | Cheaper |
| 6 | Approved skill training partners of NSDC | From 18% to exempted | Cheaper |
| 7 | Sale of used Electric Vehicle by and to individuals | Reduced to 5% | Cheaper |
| 8 | Sale of used EV by businesses after refurbishment | From 12% to 18% on their profit | Clarified |
Key Highlights from the 55th GST Council Meeting
- A track-and-trace method will be implemented for commodities that are prone to tax evasion.
- Tax officials provide temporary identity numbers to persons who are not required to register yet engage in taxable activities.
- Beginning April 1, 2025, inter-state reserve charge mechanism transactions will fall within the ISD framework.
- The legal basis for invoice management systems (IMS) will be developed.
- Starting April 1st, 2025, a new GST rate structure has been approved for hotel restaurant services, offering the option of 18% with ITC or 5% without.
- Body corporate sponsorship services will no longer be subject to reverse charge.
- The GST Council deferred decisions on GST rates for food delivery services and the inclusion of air turbine fuel (ATF) under GST.
- The Compensation Cess rate will be reduced to 0.1% on supplies to merchant exporters, in line with the GST rate.
Key Legislative Changes Following GST Council Recommendations
The GST Council recommended amending Section 17(5)(d) of the CGST Act, 2017, retroactively from July 1, 2017, to nullify the Safari Retreat judgment and allow ITC for construction related to plant and machinery. The definition of “pre-packaged and labelled” now covers commodities up to 25 kg or 25 liters under the Legal Metrology Act. FORM GSTR-3B filing is linked to GSTR-2B, with input tax credit reversal for credit notes. Pre-deposits for penalty appeals were reduced to 10%, and RBI-regulated payment aggregators were exempted.
Controversy:
The GST Council formed a committee to improve the IGST settlement formula by March 2025. It also faced criticism for imposing varying GST rates on popcorn, complicating the tax system.
Written by Sarthak Mishra (DNLU)
Source: https://www.gst.gov.in
