The GST Council has yesterday (9th of September) in its 54th Meeting recommended a number of changes in rates of GST for various goods and services, while also recommending various measures for facilitation of trade and for streamlining compliances in GST.
A few important measures and changes are highlighted below. It may be noted that these changes will come into force only after a suitable notification(s) and circular(s) are issued by the CBIC for the purpose.
Rate changes/clarifications
- Affiliation services provided by State/Central educational boards, educational councils and other similarly placed bodies to Government schools will be exempt prospectively.
- Affiliation services provided by universities to their constituent colleges are taxable at 18%.
- Cancer drugs namely, Trastuzumab Deruxtecan, Osimertinib and Durvalumab – Rate of be reduced from 12% to 5%.
- Car seats classifiable under 9401 to be taxed at 28% instead of 18%, prospectively.
- Electricity transmission – Provision of services incidental, ancillary or integral to the supply of transmission and distribution of electricity by transmission and distribution utilities, to be exempt when provided as composite supply.
- Extruded or expanded products, savoury or salted, falling under TI 1905 90 30 – Rate to be reduced prospectively from 18% to 12% at par with namkeens, etc.
- Flying training courses by DGCA approved Flying Training Organizations (FTOs) are exempt from GST.
- Foreign airlines – Import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India to be exempted when made without consideration.
- GTA – Provision of ancillary/intermediate services like loading/unloading, packing/unpacking, transshipment, temporary warehousing, etc., to be treated as part of composite supply.
- Life and health insurance – Group of Ministers (GoM) to holistically look into the issues pertaining to GST.
- Metal scrap – Reverse Charge Mechanism to be introduced, and TDS of 2% to be applicable in B-to-B supplies.
- Preferential Location Charges (PLC) are eligible for the same tax treatment as the main supply of construction service.
- Renting of commercial property by unregistered person to a registered person to be brought under Reverse Charge Mechanism (RCM).
- Research and development services by a Government Entity; or a research association, university, college or other institution to be exempted from GST.
- Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways are classifiable under Heading 8415 and attract GST @ 28%.
- Transport of passengers by helicopters on a seat share basis to be taxed at 5%. Charter of helicopters to continue at 18%.
Trade facilitation measures
- B2C e-invoicing to be brought in to improve business efficiency.
- IGST refunds on exports – Rules 96(10), 89(4A) and 89(4B) recommended to be omitted from CGST Rules, 2017 to simplify and expedite refunds.
- IGST refunds on exports where benefit of concessional/ exemption notifications specified under Rule 96(10) of CGST Rules, 2017 has been availed on the inputs. Refunds are not in violation of said Rule if IGST and compensation cess subsequently paid on imported inputs and B/E reassessed.
- Input Tax Credit on demo vehicles by the dealers of the vehicle manufacturers to be clarified.
- Invoice Management System to be brought in to allow the taxpayers to accept, reject, or to keep the invoices pending for availment of Input Tax Credit.
- Place of Supply of advertising services provided by Indian advertising companies to foreign entities to be clarified.
- Place of Supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India to be clarified.
- Waiver of interest and/or penalty in respect of Section 73 demands for FYs 2017-18, 2018-19 and 2019-20 – Section 128A may be notified from 1 November 2024 – Procedure and conditions to be notified under Rule 164 of CGST Rules, 2017.