Key Highlights from the 53rd GST Council Meeting
On June 22, 2024, the 53rd meeting of the Goods and Services Tax (GST) Council was held in New Delhi, chaired by Union Finance Minister Nirmala Sitharaman. The meeting focused on refining tax rates and service exemptions under the GST regime, aiming to streamline GST applicability across various goods and services. Here are the significant outcomes and recommendations from this crucial meeting:
Changes in GST Rates for Goods
1. Aircraft Parts and Tools:
The council decided to impose a 5% Integrated Goods and Services Tax (IGST) on imports of aircraft parts, components, testing equipment, tools, and toolkits. This uniform rate, irrespective of their Harmonized System (HS) classification, is expected to boost Maintenance, Repair, and Overhaul (MRO) activities, subject to specified conditions.
2. Milk Cans:
All milk cans made from steel, iron, and aluminium will now attract a 12% GST. This change standardizes the tax rate for milk cans, irrespective of their use, simplifying the tax structure for dairy equipment.
3. Carton Boxes:
The GST on cartons, boxes, and cases of paper has been reduced from 18% to 12%. This reduction applies to both corrugated and non-corrugated paper or paperboard, potentially lowering costs for packaging materials.
4. Solar Cookers:
All types of solar cookers, whether single or dual energy source, will now be taxed at a 12% GST rate. This measure supports the adoption of renewable energy solutions by making solar cookers more affordable.
5. Poultry Machinery Parts:
Parts of poultry keeping machinery will attract a 12% GST. This change aims to support the poultry industry by reducing the tax burden on essential equipment.
6. Sprinklers:
The GST on all types of sprinklers, including fire water sprinklers, has been set at 12%. This uniform rate aims to encourage the use of efficient irrigation and fire prevention systems.
Recommendations Relating to GST on Services
1. Exemption for Specific Indian Railways Services:
The GST Council proposed an exemption for certain services offered by Indian Railways to the general public, as well as for intra-railway transactions. This includes the sale of platform tickets and services such as retiring rooms, waiting rooms, cloakroom facilities, and battery-operated car services.
2. Accommodation Services:
Accommodation services valued up to ₹20,000 per person per month, provided for a continuous period of at least 90 days, will be exempt from GST. This exemption is expected to benefit hostels and similar accommodations run by various social and community organizations, making long-term stays more affordable.
3. Biometric-based Aadhaar Authentication:
The council recommended the phased rollout of biometric-based Aadhaar authentication for GST registration applicants across India. This measure aims to enhance the security and integrity of the GST registration process, reducing the risk of fraud.
Conclusion
The 53rd GST Council meeting brought several noteworthy changes aimed at refining the GST framework and making it more efficient and equitable. By adjusting tax rates on essential goods and exempting specific services, the council’s recommendations reflect a balanced approach to promoting economic activity while ensuring tax compliance. The phased introduction of biometric-based Aadhaar authentication is a significant step towards improving the robustness of the GST registration process. As these recommendations are implemented, they are expected to have a positive impact on various sectors, fostering growth and stability in the Indian economy.
