54th GST Council Meeting was held on 9th September, 2024 at Sushma Swaraj Bhawan in Delhi by the Hon’ble Finance Minister Smt. Nirmala Sitharaman.
54th GST Council Meeting
Through the 54th GST Council Meeting, various changes have been brought to the GST rates. These changes aims at streamlining tax rates, providing relief to individuals, as well as improving trade facilitation. The key highlights and decisions from the meeting are as follows:
Changes in GST Rates in Goods
Namkeens and Extruded/Expanded Savoury Food Products
There is a reduction of GST rate on extruded or expanded savory food products (other than unfried or uncooked snack pellets) from 18% to 12%, aligning it with namkeens, bhujia, mixtures, and similar edible products. However, please note that unfried or uncooked snack pellets will continue to attract a 5% GST. Further, this rate change applies prospectively.
Cancer Drugs
In addition to the above, there is also reduction in GST rate on cancer drugs such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%. By reducing these GST rates, the cancer treatments will become more affordable.
Metal Scrap
There is an introduction of a Reverse Charge Mechanism (RCM) for the supply of metal scrap by persons who have no registration under GST to persons who have registration under GST. However, the suppliers must register once they cross the threshold limit, and recipients will be responsible for tax payment. Additionally, a 2% TDS is applicable on B2B metal scrap transactions by registered persons.
RMPU Air Conditioning for Railways
Roof Mounted Package Unit (RMPU) air conditioning machines having usages in railways will attract a GST rate of 28% under HSN 8415.
Car and Motorcycle Seats
There is an increase in GST rate on car seats from 18% to 28% to maintain parity with motorcycle seats, which already attracts 28% tax.
Changes in GST Rates in Services
Life and Health Insurance
To address the issues wrt GST on life and health insurance, there will be a constitution of Group of Ministers (GoM). Their report is expected by the end of October 2024.
Passenger Transport by Helicopters
The Council has made a decision to notify a 5% GST rate on seat-sharing passenger transport via helicopters. Charter services, however, will continue to attract 18% GST.
Flying Training Courses
The Council has made a clarification that DGCA-approved flying training courses that the Flying Training Organizations conduct (FTOs) are exempt from GST.
Research and Development Services
Research and development services provided by government entities, universities, and research institutions funded by government or private grants will be exempt from GST.
Preferential Location Charges (PLC)
The Council has also made a clarification that Preferential Location Charges (PLC) for residential, commercial, or industrial properties are part of a composite supply with construction services, attracting the same GST rate as the main service.
Affiliation Services
Affiliation services that the educational boards like CBSE provide are taxable. However, of these services are by state or central boards to government schools, then it will be exempt going forward. Further, there will be regularization of past tax treatment for such services between July 2017 and June 2021.
Import of Services by Branch Offices
Services imported by branch offices of foreign airline companies from related parties abroad will be exempt from GST, provided no consideration is involved.
Renting of Commercial Property
Renting of commercial property by unregistered persons to registered entities will now fall under the Reverse Charge Mechanism (RCM) to prevent revenue leakage.
Ancillary Services by GTA
When ancillary services (loading, unloading, packing, etc.) are provided alongside goods transportation by road, they will be treated as part of a composite supply and taxed accordingly.
Measures wrt Invoicing
B2C E-Invoicing
The Council has made a recommendation for launching a pilot project for e-invoicing in the B2C segment, following its success in the B2B sector. By doing this, there will be increase in business efficiency and it will also allow consumers to verify invoice reporting in GST returns.
Invoice Management System and New Ledgers
The Council has made discussions wrt enhancements to the GST return system, including the introduction of ledgers for Reverse Charge Mechanism (RCM) and Input Tax Credit Reclaim, as well as an optional Invoice Management System (IMS) to reduce errors and improve ITC reconciliation.
What becomes cheaper and costlier?
| Goods/Service | HSN/SAC Code | Current Rate | Recommended Rate | Costlier/Cheaper |
|---|---|---|---|---|
| Cancer drugs such as Trastuzumab Deruxtecan, Osimertinib and Durvalumab | 9804 | 12% | 5% | Cheaper |
| Namkeens and Extruded/Expanded Savoury food products | 19059030 | 18% | 12% (prospective) | Cheaper |
| Car and Motor cycle seats | 9401 | 18% | 28% (prospective) | Costlier |
| Transport of passengers by helicopters | 9964 | 18% | 5% on seat-share basis; 18% on charter | Cheaper |
| Import of services by branch office of foreign airlines | Taxable | Exempted | Cheaper |