The 53rd GST council meeting took place on 22nd June 2024 under the chairmanship of Union Finance Minister, Nirmala Sitharaman. There were many important agendas at the meeting this time regarding tax rate changes and exemptions of services under the goods and service act.
Major Tax Rate Changes of Goods
1. Aircraft Parts and Tools: 5% IGST on imports of parts, components, testing equipment, tools and tool-kits of aircrafts.
2. Milk Cans: 12% GST on all steel, iron, and aluminium milk cans.
3. Carton Boxes: GST on cartons, boxes, and cases of both corrugated and non-corrugated paper board reduced from 18% to 12%.
4. Solar Cookers: 12% GST on all solar cookers whether single or dual energy source
5. Poultry Machinery Parts: 12% GST on parts of poultry keeping machinery.
6. Sprinklers: 12% GST on all types of sprinklers, including fire water sprinklers.
Exemptions Under GST
1. Exemption of Extra Neutral Alcohol – The 53rd GST Council Meeting recommended amending Section 9(1) of the CGST Act, 2017 to exempt Extra Neutral Alcohol (ENA) used in the manufacture of alcoholic liquor for human consumption from GST.
2. Exemption To Certain Railway Services – Government now exempts GST on services by Indian Railways to the common man, including the sale of platform tickets, cloak rooms, battery-operated car services, and intra-railway supplies.
3. Exemption on Hostel Accommodation Services – Hostel accommodation services, previously taxable if provided outside educational institutions, are now exempt, similar to those within educational institutions. This exemption applies to services rendered for 90 days or more, with a cap of ₹20,000 per person per month, benefiting students and working professionals. It also extends to privately-run hostels meeting the specified criteria.
4. Corporate Guarantees – Corporate guarantees for goods or services with full Input Tax Credit (ITC) availability will be exempt from GST.
Changes in the GST Regulations
During the 53rd GST Council meeting under Finance Minister Nirmala Sitharaman on June 22, 2024, there were several important decisions taken to refine GST regulations –
New GSTR-1A Introduced
The introduction of GSTR-1A, a new form allows taxpayers to amend or add details to their GSTR-1 for the current tax period/IFF for the first and second months of the quarter before filing GSTR-3B.
Interstate Supplies Threshold Reduced
The threshold for reporting Business-to-Consumers (B2C) interstate supplies invoice-wise in GSTR-1’s Table 5 has been reduced from ₹ 2.5 lakh to ₹ 1 lakh, making it easier to report smaller transactions.
GSTR-4 Due Date Extended
The GST Council has extended the due date for composition taxpayers to file GSTR-4 from April 30 to June 30, effective from the financial year 2024-25 onwards.
Change in TCS Rate For ECOs
The GST Council will lower the Tax Collected at Source (TCS) rate for Electronic Commerce Operators (ECOs) from 1% to 0.5%, split equally between CGST and SGST or fully under IGST.
GSTR-7 Made Mandatory
Filing GSTR-7 is now mandatory even if no TDS is deducted, with invoice-wise reporting required and no late fees for nil returns.
Exemption From GSTR-9/9A Filling
Taxpayers with an aggregate annual turnover up to Rs.₹ 2 crore will be exempted from filing the annual return in GSTR-9/9A for the financial year 2023-24 as declared in 53rd GST Council Meeting.
Modification to Section 16(4)
There is modification by the GST Council in Section 16(4), setting the deadline to claim ITC for past fiscal years up to 2020-21 as November 30, 2021, applicable retrospectively from July 1, 2017. Additionally, the provision is relaxed for returns filed within 30 days of registration cancellation revocation.
Changes in Rule 88D of CGST
Under CGST Rule 88B, interest is more chargeable on amounts available in the electronic cash ledger if GSTR-3B is filed late but the ledger is debited on time. A new Section 128A waives interest and penalties for non-fraudulent cases under Section 73 of the CGST for fiscal years 2017-18 to 2019-20 if paid by March 31, 2025.
Amendments to Sections 73 and 74
Amendments to Sections 73 and 74 will unify the time limits for issuing demand notices and orders, and extend the period for taxpayers to pay reduced penalties from 30 to 60 days. The monetary limits set for GST appeals are: ₹ 20 lakh for the GST Appellate Tribunal, ₹ 1 crore for High Courts, and ₹ 2 crore for the Supreme Court.
Changes in Sections 107 and 112
There are amendments in Sections 107 and 112 to reduce the pre-deposit amounts for appeals, with a maximum of ₹.₹ 20 crore for CGST and SGST.
There is also a reduction in pre-deposit for appeals to the GST Appellate Tribunal from 20% to 10%, with a cap of ₹ 20 crore each for CGST and SGST.
Sunset Clause to amend Sections 109 & 117
A sunset clause for anti-profiteering cases will shift the hearing panel to the principal bench of GSTAT. For new cases registered the sunset date recommended is April 1, 2025.
Time Period For Appeals To GSTAT
There is a modification in Section 112. Taxpayers now have a three-month period for filing appeals to the GST Appellate Tribunal, effective from the future announcement date, likely by August 5, 2024.
New Section 11A
A new Section 11A will regularize non-levy or short levy of GST due to common trade practices.
Mechanism For refund additional IGST paid
There will be implementation of a mechanism to refund additional IGST paid due to upward price revisions post-exports. However, there will be no IGST refunds on exports where export duty is payable, including supplies to SEZ units or developers.
Biometric-based Aadhaar Authentication
Biometric-based Aadhaar authentication for GST registration will roll out nationwide in phases through GST Suvidha Kendras.
Mechanism Clarified For Demands in DRC-03
A circular will detail the mechanism for adjusting demand amounts paid via DRC-03 against pre-deposit amounts for GST appeals.
Amendment in Section 122(1B)
Section 122(1B) will be retrospectively amended from October 1, 2023. It clarifies that it only applies to e-commerce operators who must collect TCS under Section 52.
Press Release of 53rd GST Council Meeting
Download the complete press release issued by the Finance Ministry after the conclusion of the press conference on 22nd June 2024.
Download Press Release (https://pib.gov.in/PressReleasePage.aspx?PRID=2027982)
