Lagatar24 Desk
New Delhi: The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, introduced significant tax revisions aimed at streamlining processes and offering relief in select areas. The updates include tax reductions for essential goods and exemptions for specific services, while also raising rates on certain items.
The GST on Fortified Rice Kernels (FRK), supplied through the Public Distribution System (PDS), has been reduced to 5%, benefiting weaker sections of society. Gene therapy treatments have been fully exempted from GST, enhancing affordability for patients. Similarly, a 5% concessional GST rate has been extended to food preparations distributed under government welfare programs. The assembly of Long Range Surface-to-Air Missile (LRSAM) systems and imports related to International Atomic Energy Agency (IAEA) inspections will now enjoy IGST exemptions. Pepper and raisins sold directly by agriculturists have been clarified as non-taxable under GST.
However, certain items are set to become more expensive. The GST on old and used vehicles, including electric variants, has been raised from 12% to 18%, barring select petrol and diesel models. Ready-to-eat popcorn, depending on its preparation and packaging, will attract a GST of either 12% or 18%. Autoclaved aerated concrete (ACC) blocks with over 50% fly ash content now fall under a 12% GST rate. Sponsorship services provided by corporates are now under the Forward Charge Mechanism, potentially raising associated costs. Additionally, appeals involving penalties only will now require a higher pre-deposit.
The council has clarified that vouchers are neither goods nor services and are thus not subject to GST. Penalties collected by banks and NBFCs for non-compliance with loan terms are also exempt. The definition of “pre-packaged and labelled” has been updated to align with the Legal Metrology Act, covering items meant for retail sale and weighing up to 25 kg or 25 litres.
