On Saturday 21 December 2024, the 55th GST Council Meeting was held in Jaisalmer, Rajasthan. Nirmala Sitharaman, the Finance Minister chaired the meeting to bring changes in the GST regime which affected the prices of various goods and services. Let’s have a look at the goods and services whose prices increased, and decreased or the decision has been deferred.
Goods and Services Becoming Expensive
- Used automobiles: To promote the adoption of EVs and boost the sales of new electric vehicles, the GST council has raised the GST on used cars including EVs. The GST has been increased from 12% to 18%, which is going to make the used car segment expensive. Having said that, the GST is only applicable to second-hand or used car businesses and not individuals selling their used cars.
- Popcorn Tax: Wondering what is popcorn tax? Yes in this GST Council Meeting, 18% GST has been decided to be levied on caramelized popcorns. This has taken the internet by storm. However, pre-packaged and labeled ready-to-eat snacks or popcorns have a 12% GST on them and non-pre-packaged ones only missed with salt popcorns will have a 5% GST on them.
Goods and Services Becoming Cheaper
- Gene Therapy: During this 55th GST Council Meeting, gene therapy is now going to be completely exempted from the GST regime. In addition, the exemption has been extended to IGST on surface-to-air-missiles.
- Raisins, pepper, Rice Kernels, AAC Blocks: As per the GST Council Meeting update, GST rates on the fortified rice kernels which are used mainly for public distribution have been decreased from 18% to 5% bracket.
The ASC Blocks, which have a 50% fly ash ratio will also get a deduction in GST and the new rate is 12%.
Black pepper, and raisins if supplied by farmers directly, then no GST will be levied on them.
- Payment aggregators: If payment aggregators are handling payments lower than ₹ 2000 do not have to pay any GST anymore. However, this doesn’t apply to fintech companies or payment gateways.
- Bank penal changes: No more GST will be charged on penal charges by NBFCs and banks or other lenders if the borrower fails to comply with loan terms. This will reduce the cost of borrowing.
- Compensation Cess: In this GST Council Meeting, the compensation cess has been cut down to 0.1% on merchant exporters’ supplies and made in alignment with the GST rates on similar supplies.
Apart from monetary exemptions, and reductions in GST rates, the process of GST registration for small-scale enterprises has been decided to be simplified as well. The Finance Minister has said that the GST Act will be amended to incorporate such changes in the registration procedure. A concept not has been received for the same and is currently under scrutiny for approvals.
Deferred Decisions
GST Council is yet to decide changes in the rates and the GST Act for below mentioned goods and services –
- Aviation Turbine Fuel as it is a part of the crude petroleum, diesel basket.
- Floor Space Index
- Calamity Cess: A group has been formed to decide upon whether to allow states to levy calamity cess or not and thus, the decision has been deferred.
- GST on health insurance premiums to be reduced or not has not been decided yet and the GST council has been awaiting IRDAI’s comments on the same. The council has suggested the exemption of GST on policies covering up to ₹ 5 lakh where individuals other than senior citizens pay a premium.
- GST on e-commerce, quick-commerce, and food delivery apps – Council has deferred the decision of whether to levy tax on these services or not.
- Rate Rationalisation Report is deferred as well. The FM said 148 items are under scrutiny for rate change and the government needs time to do the needful.
Source: HindustanTimes
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