Key decisions taken in 53rd GST council meeting for revision of various GST rates

The 53^rd GST Council meeting was held on Saturday. Mrs.Nirmala Sitharaman Union Finance Minister presided over the meeting. “Our intent is to make GST assessees’ lives easier, simpler and less cumbersome… We are working towards less and less compliance,” Union finance minister Nirmala Sitharaman, chairperson of the body, told reporters after the council’s 53rd meeting that was held in the capital.

Highlights of the meeting:

• It is proposed to include Aadhaar-based biometric authentication to curb fake invoicing.
• A uniform GST rate of 12% was announced for all milk cans, regardless of whether they are made of steel, iron, or aluminum. This measure is expected to standardize the tax treatment of these products.
• It is proposed to bring natural gas and aviation turbine fuel (ATF) under the ambit of the GST.
• The finance minister informed that the central government reiterated its intent to bring petrol and diesel under the GST regime, pending consensus among states on the applicable tax rate. This move is seen as a step towards uniform taxation of fuel across the country.
• The council granted a GST exemption on platform tickets, aiming to ease the financial burden on passengers. This decision is part of broader efforts to make railway services more affordable.
• The GST rate on various types of carton boxes was reduced from 18% to 12%. This change is intended to benefit both manufacturers and consumers by lowering the overall cost of these essential packaging materials.
• Exemption for hostel accommodation: Services related to hostel accommodation outside educational institutions were exempted from GST up to ₹20,000 per person each month. This exemption is designed to make hostel accommodation more affordable for non-student residents.
• To help small taxpayers, the Council recommended extending the time limit to furnish the details and the returns in the form GSTR 4 from 30th April to 30th June for small taxpayers. This will apply for returns for the Financial Year 2024-25 onwards.
• The council empowered tax authorities to waive interest and penalties on past tax demands, reduced the pre-deposit amount for filing appeals, fixed monetary limits for appeals against assessees at various legal forums, and set a sunset date for anti-profiteering cases in a range of decisions aimed at easing doing business in the country.
• The GST Council has recommended waiving interest and penalties for demand notices issued under Section 73 of the GST Act. This waiver applies to cases that do not involve fraud, suppression, or misstatements.
• The GST Council has also recommended setting monetary thresholds for filing appeals by the department in various courts. “To reduce government litigation, the council has recommended a monetary limit of ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for the High Court, and ₹2 crore for the Supreme Court for filing appeals by the department,”.

In its previous meeting of GST council held on October 7, 2023, the GST Council decided to impose a 28 per cent levy on online gaming, casinos, and horse racing. Later in the March GST meeting, the council postponed the review of the 28 per cent levy imposed on the proceeds from online gaming. There are expectations that it may also review the 28 per cent levy on online games, horse racing, and casinos.

During her address, Finance Minister Sitharaman emphasized the Union Government’s commitment to aiding states through timely tax devolution, Finance Commission grants, and GST compensation settlements. She highlighted the ‘Scheme for Special Assistance to States for Capital Investment’, noting that while most loans are unrestricted, a portion remains conditional on states implementing citizen-centric reforms and specific capital projects across sectors. Sitharaman encouraged states to leverage these loans by fulfilling the stipulated criteria.