Introduction

The 53rd GST Council Meeting, held on June 22 in New Delhi, brought several significant decisions aimed at refining GST rates, easing compliance, and providing relief to taxpayers. Chaired by Union Finance Minister Nirmala Sitharaman, the meeting saw participation from finance ministers of various states and senior government officials. The primary keyword for this article is GST Council Meeting.

Reduction in GST Rates

GST on Carton Boxes

One of the most notable decisions was the reduction of GST on carton boxes. The Council decided to lower the GST rate on all types of carton boxes from 18% to 12%. This move is particularly beneficial for apple growers in Himachal Pradesh, Jammu, and Kashmir, as it reduces the cost of packaging.

Uniform GST Rate on Milk Cans

The GST Council imposed a uniform GST rate of 12% on all milk cans made from steel, iron, and aluminum, down from the previous 18%. This change aims to streamline the tax rates and reduce the financial burden on dairy farmers.

Other Goods with Revised GST Rates

Solar Cookers: All types of solar cookers, whether single or dual energy sources, will attract a uniform GST rate of 12%.
Poultry Machinery Parts: The GST rate on parts of poultry-keeping machinery is now 12%.
Sprinklers: All types of sprinklers, including fire water sprinklers, will have a GST rate of 12%.
Aircraft Parts and Tools: A 5% IGST is imposed on imports of parts, components, testing equipment, tools, and toolkits of aircraft.

Service Exemptions

Indian Railways Services

The Council proposed exemptions for various services provided by Indian Railways. This includes platform tickets, retiring rooms, cloak rooms, battery-operated car services, and intra-railway transactions. These exemptions aim to reduce the financial burden on railway passengers.

Accommodation Services

Accommodation services, especially for students and working professionals, have been exempted from GST if the accommodation costs up to ₹20,000 per month per person for stays of 90+ days. This exemption provides significant relief for long-term stays.

SPV Services

SPV services to Indian Railways and maintenance services provided by Indian Railways to SPVs have been exempted from GST.

Compliance Measures

Waiver of Interest and Penalties

To ease the compliance burden, the GST Council recommended waiving interest and penalties for tax demand notices issued for fiscal years 2017-18, 2018-19, and 2019-20, provided the full tax amount is paid by March 31, 2025.

Input Tax Credit (ITC)

The Council extended the time limit for availing ITC on invoices and debit notes under Section 16(4) for fiscal years 2017-18 to 2020-21, deemed as 30.11.2021 for returns filed by this date.

Aadhaar Authentication

Nationwide implementation of biometric-based Aadhaar authentication for GST registration applicants was recommended in phases. This measure aims to enhance registration integrity and curb fraudulent input tax credit claims.

Monetary Limits for Appeals

Monetary Limits for Department Appeals

The Council approved monetary limits for department appeals:

GST Appellate Tribunal: ₹20 lakh
High Court: ₹1 crore
Supreme Court: ₹2 crore

Reduction in Pre-Deposit Amount for Appeals

The pre-deposit amount required for filing appeals under the GST Act has been reduced to ease the cash flow for taxpayers.

Other Key Decisions

Anti-Profiteering Sunset Clause

A sunset clause from April 1, 2025, was introduced for filing complaints under anti-profiteering matters. All such matters will be handled by the GST Appellate Tribunal.

TCS Rate Reduction

The TCS rate by Electronic Commerce Operators (ECOs) was reduced from 1% to 0.5% to ease the financial burden on suppliers.

Exemption of GST on Extra Neutral Alcohol

Extra Neutral Alcohol used for manufacturing alcoholic liquor was recommended to be excluded from GST.

Amendments in IGST and CGST Acts

Amendments were recommended to restrict IGST refund in cases where export duty is payable and to establish a uniform time limit for issuing demand notices and orders.

Conclusion

The 53rd GST Council Meeting brought a series of changes aimed at simplifying the GST regime, reducing compliance burdens, and providing relief to taxpayers. These decisions are expected to have a significant impact on various sectors and enhance the ease of doing business in India. The next GST Council meeting will further address pending agenda items and continue the effort towards a more streamlined tax system.