Highlights from the 54th GST Council Meeting
Here are the key decisions made by the GST Council:
1. Phased Implementation of E-invoicing for B2C Transactions:
The Council recommended introducing e-invoicing for B2C transactions in phases to prevent false invoicing. This system will allow customers to verify invoices before reporting them in GST returns. Until now, e-invoicing applied only to B2B transactions for registered persons with a turnover exceeding Rs. 5 crore.
2. Enhancements to the GST Return Filing System:
After launching the Invoice Management System, the Council outlined additional enhancements to the GST return filing process, including the introduction of a Reverse Charge Mechanism (RCM) ledger and an Input Tax Credit (ITC) Reclaim ledger.
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3. Status Reports by Group of Ministers (GoM):
Status reports from the GoMs on rate rationalisation and real estate were submitted, paving the way for further discussions on these topics at upcoming Council meetings.
4. GST on Online Gaming, Casinos, and Racecourses:
No changes were made to the GST rate for online gaming. As decided in the 50th GST Council meeting in October 2023, the 28% GST rate continues to apply to casinos, online games, and racecourses. The Council reviewed the sector after six months of implementation, noting that revenue from online gaming surged by 412% to Rs. 6,909 crores, while casino revenues increased by 30%, from Rs. 164 crores to Rs. 214 crores.
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5. Formation of Two New GoMs:
A GoM on medical and health insurance was formed as an extension of the existing GoM on rate rationalisation, led by the Deputy Chief Minister of Bihar. New members include representatives from states such as Uttar Pradesh, West Bengal, Karnataka, Kerala, and others. The GoM is expected to submit its report by October 2024. In the meantime, the GST rate on life and health insurance remains at 18%, with further discussion deferred to the November meeting.
6. Extension of Compensation Cess:
The central government had previously extended the compensation cess on luxury and demerit goods until March 2026. The Union Minister informed that back-to-back loans and interest would be repaid by January 2026. With a total cess collection (actual and projected) of Rs. 8,66,706 crores up to March 2025, and compensation payments of Rs. 6,64,203 crores as of September 2024, a GoM will be established to examine how to manage the remaining loans and cess funds.
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7. Committee on IGST Adjustments:
A Committee of Secretaries, chaired by the Additional Secretary of Revenue, will be formed to address issues with the Integrated Goods and Services Tax (IGST). They will investigate how to recover excess IGST distributed to certain states and must submit their findings by October 2024.
8. GST Exemption on Research Funds:
Research funds granted to state-affiliated universities or research institutions under state/central laws, or institutions with income tax exemptions under Section 35 of the Income Tax Act, are exempted from GST. These funds can come from public or private sources.
Read Also: GST Update: Weekly Goods and Service Tax latest News – September 2024
9. GST Rate Change/Clarifications:
The Council provided clarifications regarding GST rate changes but did not announce any major new adjustments.
| S.No | Goods/Service | HSN/SAC Code | Current Rate | Recommended Rate | Remarks |
| 1 | Cancer drugs such as Trastuzumab Deruxtecan, Osimertinib and Durvalumab | 9804 | 12% | 5% | To make the cancer treatment more affordable |
| 2 | Namkeens and Extruded/Expanded Savoury food products | 19059030 | 18% | 12% | The change would be applicable prospectively |
| 3 | Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways | 8415 | 28% | ||
| 4 | Car and Motor cycle seats | 9401 | 18% | 28% | The change would be applicable prospectively |
| 5 | Transport of passengers by helicopters | 9964 | 18% | 5% |
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