Key Recommendations of the 55th GST Council Meeting

Summary of Recommendations:

1. Changes in GST Rates

• Reduction in Tax Rates:
  • Fortified Rice Kernel (FRK): GST reduced to 5%.
  • Compensation Cess for merchant exporters reduced to 0.1%.
• Exemptions:
  • Gene therapy.
  • Imports of certain equipment by International Atomic Energy Agency teams.
  • Food preparations for government programs aimed at the economically weaker sections.
• Other Clarifications:
  • Items like fresh or dried pepper and raisins supplied by agriculturists are not liable for GST.
  • Specific tax rates defined for various forms of popcorn.

2. Services

• Sponsorship services provided by body corporates moved to the Forward Charge Mechanism.
• Contributions by insurance companies to the Motor Vehicle Accident Fund are GST-exempt.
• Amendments to GST on hotel services based on accommodation value, effective April 1, 2025.
• Exemptions for commercial property leasing under specific schemes.

3. Measures for Trade Facilitation

• Clarified that certain warehousing transactions are not considered supply.
• Tax treatment of vouchers simplified:
  • Principal-to-principal transactions exempt, but services related to vouchers (advertising, branding) are taxable.
• Late fee waivers for delayed filing of GST reconciliation forms (2017-2023).

4. Compliance Streamlining

• Introduction of a “Track and Trace Mechanism” for evasion-prone commodities.
• Mandating correct declaration of the recipient state for online services.
• Enabling temporary identification numbers for non-registered individuals needing GST compliance.

5. Legal and Procedural Changes

• Retrospective clarification of “plant and machinery” definitions under Input Tax Credit (ITC) rules.
• Reduced pre-deposit rates for filing penalty-only appeals.
• Modifications to Input Services Distributor (ISD) mechanism for inter-state transactions.
• Enhanced invoice management system with legal support for better credit adjustments.

6. Miscellaneous Measures

• GST Appellate Tribunal (GSTAT) operationalization framework reviewed.
• Group of Ministers to study natural disaster levies and other specific issues raised by states.
• Deferral of GST applicability on charges collected by municipalities for granting Floor Space Index (FSI).

The above measures aim to simplify GST compliance, address industry concerns, and streamline tax rates and exemptions. Let me know if you’d like a more detailed breakdown of any specific section.