GST Council’s 53rd Meeting: Key Recommendations

Posted by Written by Archana Rao Reading Time: 4 minutes

The recommendations of the 53rd GST Council meeting, held on June 22, 2024 in New Delhi, include several measures to lessen the tax and legal burdens on taxpayers in India as well as steps that can be taken to facilitate trade. These recommendations will be implemented once the relevant circulars, notifications, or law amendments are issued, which will have legal force.

The 53rd GST Council meeting was chaired by Union Finance Minister Nirmala Sitharaman, in New Delhi, with the attendance of the Union Minister of State for Finance, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha, as well as finance ministers of various states and senior officers.

The GST Council reportedly made several decisions to lessen the tax burdens on small and medium taxpayers.

To read the complete GST recommendations, see here for the official notification: Recommendations of 53rd GST Council Meeting

Recommendation on GST rates on goods and services

a) Proposed changes in GST rates for goods:

  1. Aircraft Parts: A uniform rate of 5 percent IGST on imports of parts, components, and equipment for aircrafts. 
  2. Carton, Boxes, and Cases: Reduced GST from 18 percent to 12 percent for both corrugated and non-corrugated paper products.
  3. Solar Cookers: Raised to 12 percent GST for all solar cookers.
  4. Research Equipment: IGST exemption on imports for the RAMA program (Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction).
  5. SEZ Imports: Compensation Cess exemption for authorized SEZ operations effective from July 1, 2017.

b) Proposed changes in GST rates for services:

  1. Indian Railways: Exemptions on platform tickets, retiring rooms, waiting rooms, cloakroom services, battery-operated car services, and intra-railway transactions.
  2. SPV Services: Exemption for services provided by SPVs to Indian Railways.
  3. Accommodation Services: Exemption for services with accommodation up to INR 20,000/month (US$239.67) per person for stays over 90 days.
  4. Insurance Services: Co-insurance premium, reinsurance commission transactions, and retrocession declared as no supply.
  5. Specified Insurance Schemes: Regularization of GST liability on reinsurance services.
  6. RuPay and BHIM-UPI Incentives: Further sharing of incentives declared non-taxable.

In addition, the GST Council proposed certain benefits for students residing in specific types of rental housing.

The Goods and Services Tax (GST) regime came into force after the Constitutional (122nd Amendment) Bill was approved by both Houses of Parliament in 2016. It was implemented in 2017 with the goal of streamlining and standardizing India’s tax system, which previously comprised various levies imposed by the states and the federal government. In accordance with Article 279A (1) of the amended Constitution, the President established the GST Council as a joint forum of the central government and the states. The members of the GST Council include the Union Finance Minister (chairperson), the Union Minister of State for Finance, and a minister in charge of finance or taxation or any other portfolio as nominated by each state.

Measures to boost trade

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Among the suggestions meant to facilitate trade are new procedures for obtaining refunds, modifications to pre-deposits for appeals, and relaxed requirements for input tax credit (ITC) claims. The GST Council has recommended waiving interest and penalties for demand notices issued under Section 73 of the CGST Act for the fiscal years 2017-18, 2018-19 and 2019-20, in cases where the taxpayer pays the full amount of tax demanded in the notice up to March 31, 2025.

The maximum sum to file an appeal with the appellate body was reduced from INR 2.5 million (US$299,591) CGST and INR 2.5 million (US$299,591) SGST to INR 2 million (US$239,673) CGST and INR 2 million (US$239,673) SGST. Additionally, the pre-deposit required to file an appeal with the Appellate Tribunal has been lowered from 20 percent to 10 percent, with a maximum of INR 2 million (US$239,673) in CGST and INR 2 million (US$239,673) in SGST.

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Easing the legal burden on taxpayers

The GST Council suggested a minimum threshold of INR 2 million for the Appellate Tribunal, INR 10 million (US$119,836.5) for the High Court, and INR 20 million (US$239,673) for the Supreme Court for submitting appeals. This measure aims to reduce tax litigation and is expected to benefit both taxpayers and the government.

The GST Council has also decided to adopt Form GSTR 1A, another move aimed at helping taxpayers, to allow them to add details they may have overlooked when filling out Form GSTR 1. Additionally, taxpayers can use the new form to correct any errors they made when submitting their details on Form GSTR 1.

Other notable recommendations of the 53rd GST Council

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The 53rd GST Council also proposed an amendment to Section 112 of the CGST Act, 2017, to enable the three-month window for submitting an appeal before the Appellate Tribunal to begin from a date that the government will notify regarding the appeal and revision.

Additionally, the Council suggests that any new anti-profiteering applications be submitted by April 1, 2025. The Council has recommended amendments to Section 171 and Section 109 of the CGST Act, 2017, to provide a sunset clause for anti-profiteering under GST and to assign the handling of anti-profiteering cases to the Principal Bench of the GST Appellate Tribunal (GSTAT).

Conclusion

During its June 22nd meeting, the GST Council approved several procedural and compliance-related norms intended to provide businesses and taxpayers with much-needed clarity and relief. Its decisions to lower the amount of the pre-deposit for filing appeals, extend the deadline for input tax credits, modify the amount required to file appeals under the GST Appellate Tribunal, and add a sunset clause to the anti-profiteering provisions are all viewed as positive steps that will support trade and industry.

(US$1 = INR 83.45)

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