54th GST Council Meeting highlights: What's getting cheaper and what’s getting pricier

Business Standard

10 Sept 202403:28

Summary

TLDRIn the 54th GST Council meeting, Finance Minister Nirmala Sitharaman announced significant changes affecting consumer wallets. The GST on extruded savory snacks is reduced to 12%, aligning with similar products. Cancer drugs see a decrease from 12% to 5%. However, car seat GST rises to 28%. Life and health insurance may undergo changes as a new committee reviews GST issues. Approved flying training courses are now GST exempt, and R&D services by specific institutions are also exempt. Charges for prime property locations will be taxed at the same rate as construction services. Commercial property renters may now bear GST if the landlord isn't registered. For logistics, ancillary services with a consignment note will be taxed as part of the main service.

Takeaways

🍿 **Snack Lovers Rejoice**: The GST on extruded or expanded savory snacks is reduced from 18% to 12%, aligning with other snacks like namkin and buia.
💊 **Cancer Treatment Relief**: Life-saving cancer drugs see a significant GST reduction from 12% to 5%.
🚗 **Car Seat Cost Increase**: GST on car seats increases from 18% to 28%, matching the rate for motorcycle seats.
🛫 **Helicopter Rides Taxed**: GST for seat share helicopter rides is set at 5%, while charter flights remain at 18%.
👨‍✈️ **Pilot Training Boost**: Approved flying training courses are now exempt from GST, easing the financial burden for aspiring pilots.
🔬 **R&D Services Exemption**: R&D services provided by specific institutions are exempt from GST, encouraging innovation.
🏡 **Property Location Tax**: Charges for better locations or PLCs in property purchases are taxed at the same rate as the construction service.
✈️ **Foreign Airlines Import Tax**: GST exemption for foreign airlines with branch offices importing services remains, with past issues sorted based on current guidelines.
🏢 **Commercial Property Rent GST Shift**: If the landlord isn't registered, GST on commercial property rent will now be paid by the tenant.
🚚 **Logistics Service Tax Clarity**: Ancillary services offered by a Goods transport agency with a consignment note will be taxed as part of the main transportation service; separate services face a different GST rate.

Q & A

What was the purpose of the 54th GST Council meeting chaired by Finance Minister Nirmala Sitharaman?
-The purpose of the 54th GST Council meeting was to discuss and implement changes in the Goods and Services Tax (GST) rates, which could affect the financial implications for various goods and services.
What is the new GST rate for extruded or expanded savory snacks?
-The new GST rate for extruded or expanded savory snacks has been reduced from 18% to 12%.
How does the GST change for savory snacks affect other similar products like namkin and buia?
-The reduction in GST for savory snacks aligns their tax rate with other similar products like namkin and buia, which are already taxed at 12%.
What is the current GST rate for unfried snack pellets?
-The GST rate for unfried snack pellets remains unchanged at 5%.
What is the significant change in GST for life-saving cancer drugs?
-The GST on some life-saving cancer drugs has been significantly reduced from 12% to 5%.
Why might upgrading car seats become more expensive after the GST changes?
-The GST on car seats has increased from 18% to 28%, making it more expensive for those planning to upgrade their vehicle's interior.
What is the proposed action for the GST-related issues in life and health insurance?
-A new committee will be set up to look into the GST-related issues for life and health insurance, with updates to be provided later.
What is the GST rate for seat share helicopter rides?
-The GST for seat share helicopter rides is set at 5%.
How does the GST change affect aspiring pilots looking to learn flying?
-Approved flying training courses are now exempt from GST, making it less expensive for aspiring pilots to learn to fly.
What is the change in GST for R&D services provided by specific institutions?
-R&D services provided by specific institutions will now be exempt from GST.
How does the GST change impact those renting commercial property if the landlord is not registered?
-If the landlord is not registered, the GST for renting commercial property will now be paid by the tenant.
What is the new GST rule for ancillary services offered by a Goods Transport Agency?
-Ancillary services offered by a Goods Transport Agency with a consignment note will be taxed as part of the main transportation service. If these services are billed separately, they will face a different GST rate.

Outlines

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💼 GST Council Meeting Outcomes

The Finance Minister, Nirmala Sitharaman, chaired the 54th GST Council meeting resulting in significant changes to the Goods and Services Tax (GST) rates. The meeting brought both good and bad news for consumers and businesses. On the positive side, the GST on extruded or expanded savory snacks was reduced from 18% to 12%, aligning it with other snacks like namkin and buia. Additionally, life-saving cancer drugs saw a substantial GST cut from 12% to 5%. On the flip side, car seats will now attract a higher GST of 28%, up from 18%, which could increase the cost of vehicle interiors. Life and health insurance may also see changes as a new committee will review GST-related issues. For services, GST on seat share helicopter rides is set at 5%, while charter flights remain at 18%. Flying training courses have been made GST exempt, and R&D services provided by specific institutions will also be exempt from GST. Property buyers seeking prime locations will now be taxed at the same rate as construction services for these locations. Foreign airlines with branch offices importing services will continue to enjoy GST exemption, with past issues to be sorted based on current guidelines. Commercial property tenants will now be responsible for GST if the landlord is not registered. Lastly, ancillary services offered by goods transport agencies will be taxed as part of the main transportation service if billed with a consignment note, but different rates apply if billed separately.

Mindmap

Keywords

💡GST

GST stands for Goods and Services Tax, which is a comprehensive indirect tax levied on the sale, manufacture, and consumption of goods and services at a national level. In the video, GST rates are a central theme as they directly impact the cost of various items and services, affecting consumers and businesses alike. For instance, the script discusses changes in GST rates for savory snacks and life-saving cancer drugs.

💡Nirmala Sitharaman

Nirmala Sitharaman is the Finance Minister of India. In the context of the video, she is mentioned as the chairperson of the 54th GST Council meeting, highlighting her role in overseeing and implementing changes to the GST rates, which are significant for the Indian economy and its taxpayers.

💡Savory Snacks

Savory snacks are a type of food product that is typically salty or spicy, and they are often consumed as a quick bite or between meals. The video discusses a reduction in the GST rate for extruded or expanded savory snacks from 18% to 12%, which is a key point for consumers who purchase these items, as it indicates a potential decrease in their cost.

💡Life-Saving Cancer Drugs

Life-saving cancer drugs refer to medications used in the treatment of cancer that can significantly improve survival rates or quality of life. The video script mentions a reduction in GST for some of these drugs from 12% to 5%, which is a significant move aimed at making these essential medications more affordable for patients.

💡Car Seats

Car seats are safety devices designed to protect vehicle occupants in the event of a crash. The script indicates an increase in the GST rate for car seats from 18% to 28%, which could lead to higher costs for consumers planning to purchase or upgrade their vehicle interiors, thus impacting their budget considerations.

💡Life and Health Insurance

Life and health insurance are types of insurance policies that provide financial protection against the risk of premature death (life insurance) or cover medical expenses due to illness or injury (health insurance). The video discusses the formation of a new committee to look into GST-related issues for these services, which could potentially lead to changes in the tax implications for insurance policies.

💡Helicopter Rides

Helicopter rides refer to the service of traveling by helicopter, which can be for tourism, transportation, or other purposes. The script specifies that GST is set at 5% for seat share helicopter rides, but charter flights remain at 18%. This distinction is important for consumers and businesses involved in helicopter services, as it affects the pricing and competitiveness of these offerings.

💡Approved Flying Training Courses

Approved flying training courses are educational programs that meet certain standards and are certified to train pilots. The video mentions that these courses are now exempt from GST, which is a positive development for aspiring pilots as it reduces the financial burden of obtaining their flying licenses.

💡R&D Services

R&D Services refer to research and development activities conducted by organizations to create new products, improve existing ones, or enhance processes. The video script states that R&D services provided by specific institutions will be exempt from GST, which can encourage more investment in innovation and technological advancement.

💡Commercial Property

Commercial property refers to buildings or land intended for business use, such as offices, retail spaces, or industrial facilities. The video discusses a change in GST rules regarding commercial property, where tenants will now be responsible for paying GST if the landlord is not registered, which is a significant shift in tax liability for those involved in commercial leasing.

💡Goods Transport Agency

A Goods Transport Agency is a service provider that facilitates the movement of goods from one place to another. The script mentions that ancillary services offered by such agencies with a consignment note will be taxed as part of the main transportation service, which is important for logistics companies to understand as it affects their tax obligations and pricing strategies.

Highlights

GST on extruded or expanded savory snacks reduced from 18% to 12%.

GST on unfried snack pellets remains at 5%.

GST on some life-saving cancer drugs slashed from 12% to 5%.

GST on car seats increased from 18% to 28%.

Life and health insurance may see changes with a new committee looking into GST-related issues.

GST set at 5% for seat share helicopter rides.

Charter flight GST remains at 18%.

Approved flying training courses are now GST exempt.

R&D Services provided by specific institutions will be exempt from GST.

GST issues for past services will stick to the current rules.

Charges for better locations or PLC's in property buying will be taxed at the same rate as construction service.

GST exemption for foreign airlines with branch offices importing services remains.

Past GST issues for foreign airlines will be sorted based on current guidelines.

For commercial property rentals, GST will now be paid by the tenant if the landlord isn't registered.

Ancillary services offered by a Goods transport agency with a consignment note will be taxed as part of the main transportation service.

If ancillary services are billed separately, they will face a different GST rate.