The 55th meeting of the GST Council took place on December 21, 2024, in Jaisalmer, Rajasthan, under the chairpersonship of the Union Finance & Corporate Affairs Minister, Smt. Nirmala Sitharaman. The meeting was pivotal as it recommended significant changes to GST rates and other reforms aimed at streamlining compliance, facilitating trade, and providing relief to individuals.
Key GST Rate Changes and Clarifications
1. Increased GST Rate on Old and Used Vehicles
- Revised Rate: GST on old and used vehicles, including EVs, increased from 12% to 18%, except for certain specified vehicles.
- The revised 18% rate applies to:
- Petrol vehicles with engine capacity ≥1200 cc and length ≥4000 mm.
- Diesel vehicles with engine capacity ≥1500 cc and length ≥4000 mm.
- SUVs.
- Applicability:
- GST is applicable only on the margin of the supplier, i.e., the difference between the purchase price and selling price (or depreciated value if depreciation is claimed).
- Not applicable to unregistered persons.
2. Clarification on Autoclaved Aerated Concrete (ACC) Blocks
- ACC blocks with more than 50% fly ash content are classified under HS 6815 and attract 12% GST.
3. GST Exemption for Agricultural Produce
- Exempt Items: Fresh green or dried pepper and raisins supplied by agriculturists are exempt from GST.
4. Redefinition of ‘Pre-Packaged and Labelled’
- The definition now includes commodities intended for retail sale and containing not more than 25 kg or 25 liters, as defined under the Legal Metrology Act.
5. GST on Popcorn
- Ready-to-eat Popcorn:
- Mixed with salt and spices: Classifiable under HS 2106 90 99, attracts 5% GST (non-pre-packaged) or 12% GST (pre-packaged).
- Mixed with sugar (e.g., caramel popcorn): Classified as sugar confectionery under HS 1704 90 90 and attracts 18% GST.
- Clarification: No new tax imposition; this clarification resolves disputes over interpretation.
6. Compensation Cess on Ground Clearance
- The explanation in Sl. No. 52B of Notification No. 1/2017-Compensation Cess (Rate) applies retroactively from July 26, 2023.
7. RBI-Regulated Payment Aggregators
- Eligible for exemption under entry Sl. No. 34 of Notification No. 12/2017-CT(R), as they qualify as ‘acquiring banks.’
- Exclusions: Payment gateways and fintech services that do not involve fund settlement are not eligible.
8. Penal Charges by Banks and NBFCs
- Penal charges collected from borrowers for non-compliance with loan terms are exempt from GST.
These revised rates will be applicable from date as notified through notification, wait for notification
For more details, access the official press release at: PIB Press Release.
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