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Published 18:48 IST, December 23rd 2024

GST Council Meeting: What's Getting Cheaper And What's Getting Pricier?

After several key recommendations during the 55th GST Council meeting prices of various goods and services are likely to fluctuate.

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GST Council Meeting: What's Getting Cheaper and What's Getting Pricier?
GST Council Meeting: What's Getting Cheaper and What's Getting Pricier? | Image: Getty Images/iStock Photo

New Delhi: After several key recommendations during the 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, prices of various goods and services are likely to fluctuate. The meeting was held on December 21 in Rajasthan’s Jaisalmer, which saw representatives from all states and Union Territories come together to discuss and announce crucial recommendations that will impact the prices of various goods and services across the country.

In a move to plug leakage, the GST Council also approved a proposal to implement 'Track and Trace Mechanism' for specified evasion-prone commodities, under which a unique mark will be affixed on such goods or packages to trace them throughout the supply chain. This is to insert an enabling provision in CGST Act, 2017 through Section 148A so as to empower the government to enforce the Track and Trace Mechanism for specified evasion-prone commodities.

"The system shall be based on a Unique Identification Marking which shall be affixed on the said goods or the packages thereof. This will provide a legal framework for developing such a system and will help in implementation of mechanism for tracing specified commodities throughout the supply chain," the finance ministry said while listing out decisions taken in the 55th Council meeting here.

"To clarify that in respect of supply of 'Online Services' such as supply of online money gaming, OIDAR services, etc. to unregistered recipients, the supplier is required to mandatorily record the name of the state of the unregistered recipient on the tax invoice and such name of state of recipient shall be deemed to be the address on record of the recipient for the purpose of section 12(2)(b) of IGST Act, 2017 read with proviso to rule 46(f) of CGST Rules, 2017," it said.

Here's a breakdown of what's getting cheaper and what's getting more expensive.

What's Getting More Expensive?

Old and Used Vehicles: The GST rate on old and used vehicles, including electric vehicles, will increase from 12% to 18%, except for certain petrol and diesel variants. This move will impact the automobiles resale market.

Ready-to-Eat Popcorn: Pre-packed and labelled ready-to-eat snacks will attract an additional 12% tax, while caramelised popcorn will attract 18% GST.

Autoclaved Aerated Concrete Blocks: These blocks will attract 12% GST if they contain more than 50% fly ash.

Sponsorship Services: Sponsorship services by corporates will be brought under the forward charge mechanism, leading to increased costs for sponsors.

Penalty-Only Appeals: Higher pre-deposits will be required for penalty-only appeals under the Appellate Authority.

What's Getting Cheaper?

Fortified Rice Kernels (FRK): The GST rate on FRK will be reduced to 5% when supplied through the public distribution system, making nutritious food more affordable for economically weaker sections.

Gene Therapy: Gene therapy has been exempted from GST to promote advancements in medical treatments and make it more accessible.

Food Preparation for Free Distribution: A concessional 5% GST rate has been extended to food inputs supplied under government programs for economically weaker sections.

Systems for Long Range Surface-to-Air Missile Assembly (LRSAM): Systems, sub-systems, and tools used for LRSAM manufacture will be exempt from IGST.

Pepper and Raisins (Direct Sales): Pepper and raisins directly sold by agriculturists have been clarified as not liable to GST, ensuring relief to farmers.

Other Key Decisions

Vouchers: Transactions involving vouchers will be exempted from GST, and provisions related to vouchers are being revised.

Penal Charges: Non-compliance with loan terms, penalties by banks, and Non-Banking Financial Companies (NBFCs) will not attract GST.

Reduction in Pre-Deposit for Appeals: The council has recommended a reduction in pre-deposit required when filing an appeal before the Appellate Authority in cases where the order in question involves only penalty amounts.

Record Revenues

With record-breaking revenue collections and special drives to curb fake invoicing, 2024 marked a significant chapter in India’s Goods and Services Tax (GST) regime. Notably, 2024 saw an all-time high GST collection of Rs 2.10 lakh crore in the month of April.

GST collections during the year surpassed the Rs 1.7 lakh crore mark almost every month. February recorded the lowest point of the year, at Rs 1.68 lakh crore, likely influenced by a shorter month and reduced economic activities post the holiday season. Revenues bounced back in March to Rs 1.78 lakh crore, and remained upbeat for the rest of the year.

The surge in April was the result of year-end tax filings, increased compliance due to stricter enforcement, and a boost in economic activity post the financial year-end. October’s collection of Rs 1.87 lakh crore marked a significant improvement. 


 

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Updated 18:48 IST, December 23rd 2024