Recommendations made during 53rd Meeting of the GST Council held on 22nd June 2024

The Goods and Services Tax (GST) Council held its 53rd Council meeting in New Delhi on 22nd June 2024, chaired by Finance Minister Nirmala Sitharaman. The GST Council inter-alia made the following recommendations relating to changes in GST tax rates, measures for facilitation of trade and measures for streamlining compliances in GST:-

1. Recommendations relating to GST rates on Goods –

• Aircraft Parts and Tools: 5% IGST on imports of parts, components, testing equipment, tools and tool-kits of aircrafts;
• Milk Cans: 12% GST on all steel, iron, and aluminum milk cans;
• Carton Boxes: GST on cartons, boxes, and cases of paper reduced from 18% to 12%;
• Solar Cookers: 12% GST on all solar cookers whether single or dual energy source;
• Poultry Machinery Parts: 12% GST on parts of poultry keeping machinery;
• Sprinklers: 12% GST on all types of sprinklers, including fire water sprinklers.

2. The following are the exemptions provided/ extended –

• Exemption on imports of specified items for defence forces extended for a further period of five years till 30th June, 2029;
• IGST exemption on imports of research equipment and buoys under the RAMA programme;
• Exemption of Compensation Cess on SEZ imports for authorized operations effective from July 1, 2017;
• Compensation cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under Ministry of Defence;
• Imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces;
• Exemption for services provided by Indian Railways to the general public, including sale of platform tickets and battery-operated car services;
• SPV services to Indian Railway and maintenance services provided by Indian Railways to SPVs have been exempted;
• Accommodation services having value of supply of accommodation up to Rs. 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days;
• Co-insurance premiums and re-insurance commission transactions between insurers will be treated as no supply, regularizing past practices;
• GST on Reinsurance Services Regularized on ‘as is where is’ basis for specified insurance schemes
• Retrocession defined as re-insurance of re-insurance, eligible for exemption;
• RERA Collections clarified as exempt from GST under entry 4 of Notification No.12/2017-CTR
• RuPay Debit Cards, Sharing incentives not taxable when defined by NPCI in consultation with banks.

3. Measures for facilitation of trade –

• Conditional Waiver of Interest and Penalty For demands under Section 73 for FY 2017-18 to 2019-20, if the full tax is paid by March 31, 2025;
• Monetary limits for department appeals – Rs 20 lakh (GST Appellate Tribunal), Rs 1 crore (High Court), Rs 2 crore (Supreme Court);
• Lowering the pre-deposit amounts required for filing appeals to ease cash flow;
• Amending Section 112 to start the 3 month appeal period from a government-notified date for filing appeals before the tribunal;
• Extension of time limit to file GSTR-4 till 30th June effective from FY 2024-25;
• Interest will not be charged for the amount available in the cash ledger at the time of filing GSTR-3B;
• Extending input tax credit time limits and providing conditional relaxations for returns post revocation;
• Insertion of new Form GSTR-1A to allow corrections in GSTR-1, which can be filed before filing GSTR-3B;
• Excluding rectified spirit/ENA from GST when used for alcoholic liquor production;
• Reduction in TCS Rate for ECOs from 1% to 0.5%;
• Section 11A Insertion for Duty Regularization;
• Prescribing a mechanism for claiming refunds on additional IGST paid due to price revisions post-export;
• Clarifying valuation rules for services provided by foreign affiliates where full input tax credit is available;
• Clause (c) or under clause (d) of Section 17(5) of CGST Act, related to blocked credits, shall not apply in respect of ducts and manhole used in network of optical fiber cables (OFCs). Hence, ITC shall be allowed in these cases;
• Place of supply of Custodial services supplied by Indian Banks to Foreign Portfolio Investors is to be determined as per Section 13(2) of the IGST Act, 2017;
• In cases of supplies received from unregistered suppliers where tax has to be paid by the recipient under RCM and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of ITC under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient;
• Transitional credit to be made available for invoices pertaining to services provided before appointed date, i.e., 30^th June 2017 and where invoices were received by Input Service Distributor (ISD) before the appointed date, through amendment to Section 140(7) of the CGST Act;
• Amendment to be made to Section 122(1B) to clarify that penal provision is applicable only for those e-commerce operators, who are required to collect tax u/s 52, and not for other e-commerce operators. The amendment shall take effect retrospectively from 1^st October, 2023;
• A circular will be issued to prescribe a mechanism for adjusting any demand amount paid through DRC-03 against the amount payable as pre-deposit for filing GST appeal.

4. Other measures pertaining to Law and Procedures – 

• Rolling out biometric-based Aadhaar authentication for registration applicants nationwide;
• Common time limit for issuing demand notices u/s 73 & u/s 74;
• Further, the benefit of reduced penalty available under the provisions of Section 73(8) shall be extended to cases where payment of tax along with interest is made within 60 days of demand, instead of the original 30 days;
• Implementing a sunset clause from April 1, 2025, for anti-profiteering applications;
• Amending laws to restrict refunds for goods subject to export duty;
• Reducing the reporting threshold for B2C Inter-State Supplies from ₹2.5 lakh to ₹1 lakh;
• Mandating monthly filing for TDS under FORM GSTR-7 with no late fee for Nil returns.