The 55th GST Council meeting in Jaisalmer resulted in a flood of demands for disaster-specific levy by several states, following a request from Andhra Pradesh for a 1% GST levy to fund their flood recovery efforts. A Group of Ministers has been formed to examine the legal and structural issues surrounding this proposal, which was discussed in detail during the council meeting. Finance Minister Nirmala Sitharaman stated that other states such as Uttar Pradesh, West Bengal, and Telangana have also expressed interest in being a part of the committee. The issue of a similar flood-cess levy by Kerala in 2019 was also brought up, with other states showing support for Andhra Pradesh's demand.
In the 55th GST Council meeting, the latest changes to GST rates were announced for various items. Ready-to-eat popcorn will now have varying GST rates depending on how it is prepared and sold. Pre-packaged popcorn will have a higher GST rate of 12%, while popcorn sold loose will have a lower rate of 5%. In the automotive sector, the GST rate for used cars sold by businesses will be increased from 12% to 18%. Additionally, vouchers will not be considered goods or services, and hence, will not be subject to GST.
During the 55th GST Council meeting, Union Finance Minister Nirmala Sitharaman announced that the Goods and Services Tax on rice kernels has been reduced from 18% to 5%, while life-saving gene therapy will now be exempt from tax. Additionally, parts used in manufacturing surface-to-air missiles will continue to be exempt from GST. However, the tax rate on caramelised popcorn has been increased to 18%, citing its harmful effects on health. The Finance Minister also clarified that payment aggregators will be eligible for exemptions, but this does not apply to payment gateways and fintech services.
On December 3, 2024, the Goods and Services Tax Council met in Jaisalmer to discuss important pre-budget consultations and health-related matters. Among the key decisions made were the proposal to increase GST on cigarettes, tobacco, and beverages to 35%, and the request for an extension for the GoM to submit its report on GST compensation cess. The Council also planned to discuss potential tax cuts for non-alcoholic beverages based on sugar and the rationalization of GST rates. Additionally, the meeting aimed to address concerns surrounding the GST on health insurance and the potential reduction of insurance levies.
The Oil Ministry has proposed the elimination of windfall profit tax on crude oil to the Finance Ministry, while also requesting the inclusion of natural gas and petroleum products under the Goods and Services Tax framework. The upcoming GST Council meeting may discuss this proposal, but many states are cautious about including petroleum products under GST due to revenue concerns. Finance Minister Nirmala Sitharaman has emphasized that the GST law already has provisions for this inclusion, and it is now up to the GST Council to reach a consensus on the matter.
The Indian government has issued several notices to leading companies, including Infosys, Eicher Motors, and Patanjali Foods, for alleged GST evasion. These notices have been issued for amounts ranging from 15 lakh to a staggering 32,403 crore rupees. Kerala has also made a demand for a 60% share in GST revenues for states, which was discussed in a recent GST Council meeting. While the implementation of machine registration for tobacco products has been completed by GSTN, there are still many challenges that remain in simplifying compliance with GST regulations. Indian Overseas Bank has taken a proactive step towards supporting startups by launching a dedicated branch in Chennai.
The 53rd GST Council Meeting, held in New Delhi, has generated significant anticipation for potential revisions to the current tax system. Stakeholders are hoping for a simplification of the current multiple tax rates and the inclusion of petrol and diesel under GST. Finance Minister Nirmala Sitharaman, speaking on behalf of the CGST, reassures taxpayers of the government's efforts to make GST compliance easier. Additionally, she announces the appointment of Bihar Deputy Chief Minister Samrat Choudhary as the Chairman of the GoM for Rate Rationalisation.
Amit Mitra, the Principal Chief Advisor to the Chief Minister of West Bengal, has written a letter to Union Finance Minister Nirmala Sitharaman, expressing his concern and anguish over the ongoing GST frauds in the country. Mitra has urged the Finance Minister to immediately call a GST Council meeting to find a solution to this issue. He also expressed his disappointment that such news is still making headlines six and a half years after the implementation of GST.