55th GST Council Meeting: All You Need to Know About New Major Tax Decisions | NewsX

Summary

The 55th GST Council meeting, led by Finance Minister Nirmala Sitharaman, introduced significant updates including a 5% GST on new electric vehicles and 18% on used vehicle transactions. Controversies surrounding GST on popcorn (12% for regular and 18% for caramelized) and penalties from banks were also addressed. Efforts to simplify the registration process for small businesses were announced, with a concept note approved. Additionally, discussions on revenue sharing between states and the central government and GST rates for health insurance and food delivery platforms were deferred. These developments aim to streamline business processes and resolve contentious issues in India’s GST system.

Takeaways

• 😀 The 55th GST Council meeting, led by Finance Minister Nirmala Sitharaman, announced several significant updates, including changes in GST rates for electric vehicles and used vehicle transactions.
• 😀 A 5% GST on new electric vehicles was introduced, and 18% GST on used vehicle transactions was clarified.
• 😀 A 0.1% compensation cess was introduced for merchant exporters, while clarifications were made about the GST on penalties imposed by banks and financial institutions.
• 😀 The debate over the GST on popcorn was addressed, with 12% GST applied to ready-to-eat popcorn and 18% to caramelized popcorn.
• 😀 The discussion on health insurance and food delivery platforms was deferred for further discussion.
• 😀 The GST Council is working towards simplifying the registration process for small companies, addressing issues faced in their current registration procedures.
• 😀 A concept note was approved for simplifying the small company registration process, with plans for legal amendments to follow.
• 😀 There are ongoing efforts by the government to increase revenue collection through new GST measures, including broadening the scope of GST applications.
• 😀 GST on penalties for GST non-compliance, particularly related to e-way bills, was clarified to ensure no GST would be levied on fines imposed by authorities.
• 😀 Discussions were held regarding the creation of a sub-committee within the GST Council to ensure that both central and state governments receive their appropriate shares of the revenue from GST collections.

Q & A

What was the key focus of the 55th GST Council meeting?

The 55th GST Council meeting focused on several important updates, including GST rates for electric vehicles, used vehicles, and food items, along with clarifications on GST penalties imposed by banks and financial institutions.

What new GST rates were introduced for electric and used vehicles?

A 5% GST was introduced on new electric vehicles, while a GST of 18% was applied to used vehicle transactions.

What is the compensation cess introduced for merchant exporters?

A 0.1% compensation cess was introduced for merchant exporters as part of the new GST updates.

What significant clarification did the Finance Minister provide regarding GST on penalty charges?

The Finance Minister clarified that no GST would be imposed on penalty charges by banks and financial institutions, addressing a contentious issue that had been debated on social media.

Which food items saw an increase in GST rates during the meeting?

The GST on ready-to-eat popcorn was increased to 12%, while the GST on caramelized popcorn was raised to 18%.

What developments related to health insurance and food delivery platforms were discussed?

Discussions on GST for health insurance and food delivery platforms were deferred for further deliberation and not finalized during this meeting.

What was the Finance Minister's stance on small businesses and the GST registration process?

The Finance Minister highlighted that small businesses face difficulties in the GST registration process due to questions regarding business size, years of operation, and input tax credit eligibility.

What solution is being proposed to simplify the registration process for small businesses?

A concept note has been prepared for a simplified GST registration process for small businesses, which would require a minor amendment in the law. This will ease the registration burden for small businesses.

What potential changes are being considered in the structure of the GST Council?

There is a proposal to create subcommittees within the GST Council to facilitate better representation of states and address issues related to revenue sharing between the central and state governments.

How did the GST Council plan to address the concerns of states regarding GST revenue sharing?

The GST Council discussed setting up a subcommittee to focus on the issue of revenue sharing between states and the central government, ensuring that states receive their fair share from the GST revenue.