Press Release: 54th GST council meeting

Union Finance Minister Smt. Nirmala Sitharaman chairs the 54th meeting of the GST Council, at Sushma Swaraj Bhawan, in New Delhi, today. Along with the Union Finance Minister, Union Minister of State for Finance Shri M P Choudhary, Chief Ministers of Goa and Meghalaya; Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana; besides Finance Ministers of States & UTs (with legislature) and Senior officers from Union Government & States are also attending the meeting.

Recommendations during 54th meeting of the GST Council

• GST Council recommends Group of Ministers (GoM) on life and health insurance-related GST with the existing GoM on Rate Rationalisation; to submit a report by the end of October 2024.
• GST Council also recommends the formation of a GoM to study the future of compensation cess.
• GST Council recommends exempting the supply of research and development services by a Government Entity, or a research association, university, college, or other institution notified under section 35 of the Income Tax Act using government or private grants.
• GST Council recommends a reduction in GST rates on cancer drugs – Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%.
• GST Council recommends rolling out a pilot for B2C e-Invoicing.

Posted On: 09 SEP 2024 7:57PM by PIB Delhi

The 54th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman, in New Delhi today. The meeting was also attended by Union Minister of State for Finance, Shri Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.

The GST Council made the following recommendations, focusing on changes in GST tax rates, relief measures, facilitation of trade, and compliance streamlining:

A. Changes/Clarifications in GST Tax Rates

GOODS

1. Namkeens and Extruded/Expanded Savoury Food Products
   • The GST rate of extruded or expanded savoury or salted products (excluding un-fried or un-cooked snack pellets) is reduced from 18% to 12%, aligning with namkeens, bhujia, mixture, and similar edible preparations under HS 2106 90.
   • GST rate of 5% continues for un-fried or un-cooked snack pellets manufactured through extrusion.
2. Cancer Drugs
   • GST rate on cancer drugs (Trastuzumab Deruxtecan, Osimertinib, Durvalumab) reduced from 12% to 5%.
3. Metal Scrap
   • Reverse Charge Mechanism (RCM) introduced for supply of metal scrap by unregistered persons to registered persons. Registered suppliers pay TDS of 2% on B2B supply.
4. Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways
   • RMPU air conditioning machines classified under HSN 8415, attracting 28% GST.
5. Car and Motorcycle Seats
   • Car seats classified under HSN 9401 attract an increased GST rate of 28%, applicable prospectively.

SERVICES

1. Life and Health Insurance
   • A GoM is constituted to examine GST on life and health insurance. The report is due by October 2024.
2. Passenger Transport by Helicopters
   • GST @ 5% on passenger transport by helicopters (seat share basis). Helicopter charters continue to attract 18% GST.
3. Flying Training Courses
   • Approved flying training courses conducted by DGCA-approved Flying Training Organizations (FTOs) are exempt from GST.
4. Supply of Research and Development Services
   • GST exemption for R&D services by government entities, research associations, or institutions notified under section 35 of the Income Tax Act.
5. Preferential Location Charges (PLC)
   • PLC for residential/commercial construction services are part of composite supply and attract the same tax as construction services.
6. Affiliation Services
   • Affiliation services by State/Central educational boards to government schools are exempt from GST, while university affiliation services attract 18% GST.
7. Import of Services by Branch Offices
   • Exemption for import of services by foreign airlines’ branch offices from related entities when made without consideration.
8. Renting of Commercial Property
   • Renting of commercial property by unregistered persons to registered persons comes under RCM to prevent revenue leakage.
9. Ancillary Services by GTA
   • Ancillary services (loading/unloading, packing/unpacking) provided by GTA in the course of transport of goods are treated as part of composite supply if issued under consignment note.

B. Measures for Facilitation of Trade

1. Waiver of Interest or Penalty for FYs 2017-18, 2018-19, and 2019-20
   • New rule 164 in CGST Rules for waiver of interest/penalty under section 128A. The payment deadline is 31st March 2025.
2. Implementation of Section 16 (5) & (6) of CGST Act, 2017
   • Special procedure for rectification of orders and clarification on input tax credit related to section 16 (5) & (6).
3. Amendments in Rule 89 and Rule 96 of CGST Rules, 2017
   • Clarification on IGST refunds on exports and removal of rules 96(10), 89(4A), and 89(4B).
4. Issuance of Clarifications
   • Circulars will clarify issues like place of supply for advertising services, ITC on demo vehicles, and place of supply for data hosting services.

C. Other Measures

1. B2C E-invoicing
   • Pilot for B2C e-invoicing to enhance business efficiency and provide invoice verification for retail customers.
2. Invoice Management System and New Ledgers
   • Introduction of RCM ledger, ITC Reclaim ledger, and IMS for better reconciliation and reduction of ITC mismatch.

The above recommendations will take effect through relevant circulars and notifications, which will hold the force of law.

Below is press release

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