52nd GST Council meeting took place on 7th October 2023 at Sushma Swaraj Bhawan, New Delhi. The meeting was presided by Smt Nirmala Sitharaman, the Union FM and attended by MoS (F) Shri Pankaj Chaudhary, the Revenue Secretary, Chairman CBIC, Member CM, Member GST, Member TP and senior officers from Union Government and States.
The 52nd GST Council meeting is being held about two months after the 51st GST Council meeting on 2nd August 2023.
52nd GST Council meeting’s key points
In a significant move towards simplifying the Goods and Services Tax (GST) structure, the Indian government has introduced several amendments and exemptions aimed at benefiting both consumers and businesses. These changes, ranging from reduced rates to exemptions, will have a notable impact on various sectors of the economy. Let’s delve into the key revisions that have been implemented:
1. Reduced GST Rates:
a) Millet Flour:
GST rates on food preparations made from millet flour in powder form, containing at least 70% millets by weight, have been revised. These products, when sold in pre-packaged and labelled form, will now attract a 5% GST, whereas they will be completely exempt if sold in other forms.
b) Imitation Zari Thread and Yarn:
Imitation zari thread or yarn made out of metallised polyester film/plastic film, falling under HS 5605, will now incur a 5% GST.
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c) Value of Foreign Going Vessels:
Foreign going vessels converting to coastal runs will be subject to a 5% Integrated GST (IGST).
d) Molasses and ENA:
GST on molasses has been significantly reduced from 28% to 5%. Additionally, Extra Neutral Alcohol (ENA) for industrial use will now incur an 18% GST.
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2. GST Exemptions:
a) Services to Government Bodies:
Pure and composite services provided to Central/State/UT governments, local authorities, and services related to functions entrusted to Panchayat/Municipality under the Constitution of India are now exempt from GST.
b) Water Supply and Sanitation Services:
Services of water supply, public health, sanitation conservancy, solid waste management, and slum improvement and upgradation supplied to the government are exempt from GST.
c) Conversion of Foreign Going Vessels:
Foreign flag foreign going vessels converting to coastal runs, subject to reconversion within six months, are now exempt from GST.
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3. Other Noteworthy Clarifications:
a) Job Work Services:
Job work services for processing barley into malt will now attract a reduced GST rate of 5%, not 18%.
b) Amnesty Scheme:
An amnesty scheme has been introduced until January 31, 2024, allowing individuals who couldn’t file an appeal against section 73 or 74 demand orders to do so, subject to a pre-deposit of 12.5% of the tax under dispute.
c) Simplified Procedures:
Several procedural changes have been implemented, such as excluding bus operators organized as companies from certain GST provisions and clarifications related to personal guarantees offered by directors to banks.
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d) SEZ Provisions:
Suppliers in Special Economic Zones (SEZ) for authorized operations will be allowed to make supplies to SEZ developers or units on payment of GST and claim refunds of the tax paid.
e) CBIC Circulars:
The Central Board of Indirect Taxes and Customs (CBIC) will issue circulars for clarifications related to personal guarantees offered by directors to banks, place of supply, and export remittances in Vostro accounts.
f) Mandatory ISD Provisions:
Input Service Distributor (ISD) provisions will be made mandatory prospectively for the distribution of Input Tax Credit (ITC).
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g) Provisional Attachments:
Provisional attachment in FORM GST DRC-22 will not be valid after one year from the date of the order.
h) Rules defined for Composition of GSTAT
Minimum age limit is 50 years while the maximum is 70 years for the President and 67 years for members of GSTAT. Advocates with 10 years experience can only be appointed as judicial members.
These revisions indicate the government’s commitment to fostering a more conducive business environment while ensuring fairness and transparency in the GST regime. It is anticipated that these changes will positively impact various sectors of the economy, providing relief to businesses and consumers alike. Stay tuned for further updates as the Indian government continues to refine and improve the GST framework to meet the evolving needs of the nation’s economy.
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