Key Highlights from the 53rd GST Council Meeting

On June 22, 2024, Finance Minister Nirmala Sitharaman led the 53rd GST Council meeting. The session covered several essential measures, such as tax amendments, the integration of Aadhaar biometrics, and exemptions for railway services.

Highlights from the 53rd GST Council Meeting:

1. Aadhaar Authentication
   The GST Council suggested rolling out biometric-based Aadhaar authentication for GST registration applicants across the country in stages. This is meant to improve the integrity of the registration process and reduce fraudulent input tax credit claims made using fake invoices.
2. Petrol and Diesel Under GST
   The central government confirmed its plan to include petrol and diesel under the GST system, but it requires agreement from the states on the tax rate. This is viewed as a move towards having the same tax for fuel nationwide.
3. GST Rate on Milk Cans
   A consistent GST rate of 12% was announced for all milk cans, whether made from steel, iron, or aluminium. This aims to uniformise the tax treatment of these products.
4. Indian Railways Services
   The council decided to exempt platform ticket sales, retiring/waiting rooms, cloakroom services, battery-operated car services, and intra-railway transactions from GST to reduce passengers’ financial burden.
5. Reduction In GST For Carton Boxes
   The GST rate on different types of carton boxes was lowered from 18% to 12%. This change aims to help manufacturers and consumers by reducing the overall cost of these essential packaging materials.
6. Exemption For Hostel Accommodation
   Hostel accommodation services outside educational institutions are now exempt from GST for amounts up to ₹20,000 per person monthly. This exemption aims to make hostel living more affordable for non-student residents.
7. Central Support And Conditional Loans To States
   In her address, Finance Minister Sitharaman stressed the Union Government’s dedication to supporting states with timely tax distribution, Finance Commission grants, and GST compensation payments. She discussed the ‘Scheme for Special Assistance to States for Capital Investment,’ explaining that while most loans are flexible, some are conditional on states implementing reforms focused on citizens and specific capital projects. Sitharaman urged states to take advantage of these loans by meeting the required criteria.
8. Extension Of GSTR 4 Filing Deadline For Small Taxpayers
   To assist small taxpayers, the Council proposed extending the deadline for filing details and returns via GSTR 4 from April 30 to June 30. This extension will apply to returns from the financial year 2024-25 onwards.
9. Waiver Of Interest And Penalties For Non-Fraudulent Cases
   Finance Minister Nirmala Sitharaman announced that the GST Council proposed exempting interest and penalties for demand notices under Section 73 of the GST Act. This exemption applies to cases not involving fraud, suppression, or misstatements.
10. New Monetary Limits For Filing Appeals
    Finance Minister Nirmala Sitharaman announced that the GST Council proposed specific financial thresholds for the government to file appeals in different courts. According to her, the council suggested limits of ₹20 lakh for appeals to the GST Appellate Tribunal, ₹1 crore for appeals to High Courts, and ₹2 crore for appeals to the Supreme Court. This measure aims to reduce litigation involving the government.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.