55 GST Council Meeting - Summary

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The 55th GST Council meeting held in Jaisalmer on December 21, 2024, introduced several key recommendations and decisions impacting GST laws, rates, and exemptions. Here's a summary of the significant takeaways:

Key Exemptions and Rate Revisions

  1. Exemptions from GST:

    • Transactions involving vouchers.

    • Gene therapy services.

    • Penal charges by banks and NBFCs.

    • Sponsorship services by body corporates under forward charge (currently under reverse charge).

  2. Taxpayer-specific changes:

    • Taxpayers under the composition scheme are exempted from the reverse charge mechanism for renting commercial/immovable properties from unregistered persons, effective October 10, 2024.

  3. Hotel and Restaurant Services:

    • The definition of declared tariff for hotels has been omitted.

    • From April 1, 2025, restaurant services in hotels will have two GST rate options:

      • 18% with ITC.

      • 5% without ITC.

    • The choice applies to the respective financial year.

  4. Used Vehicle Sales:

    • GST increased from 12% to 18% on the margin of the supplier for old and used vehicles, including EVs.

  5. Additional Exemptions:

    • Payment aggregators regulated by RBI are exempted from GST.

Amendments and Clarifications

  1. Law Amendments:

    • Changes to Section 17(5) to nullify the Supreme Court's decision in the Safari Retreats case.

    • Introduction of a legal framework for the Invoice Management System (IMS).

  2. Input Service Distribution (ISD):

    • ISD will include inter-state RCM transactions starting April 1, 2025.

  3. Temporary Identification Numbers:

    • Provision for tax officers to grant temporary identification numbers to unregistered persons.

  4. Compliance Facilitation:

    • Late fee waiver for filing Forms GSTR-9 and GSTR-9C for FY 2017-18 to FY 2022-23.

    • Track-and-trace mechanisms to combat tax evasion for specific goods.

GSTAT and Other Decisions

  1. GST Appellate Tribunal (GSTAT):

    • Procedural rules for the GSTAT's internal functioning will be notified after further review by the law panel.

  2. Pending Issues:

    • No decision on GST under the RCM for charges collected by municipalities for the grant of FSI.

Policy Development and Future Directions

  1. Compensation Cess:

    • The timeframe for the Group of Ministers to restructure GST compensation has been extended to June 30, 2025.

  2. Natural Disaster Levy:

    • Formation of a new Group of Ministers to develop a uniform policy for levy imposition during natural disasters, as requested by Andhra Pradesh.

Implementation Timeline

These changes will be implemented after necessary law amendments, notifications, or clarifications.

For businesses and stakeholders, it is essential to stay updated on notifications and implementation schedules for compliance.

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