Rate Changes and Clarifications as per 54th GST Council Meeting
Home > Rate Changes and Clarifications as per 54th GST Council Meeting
October 29, 2024
Introduction
The 54th GST Council meeting introduced key changes to improve the efficiency, accessibility, and responsiveness of the GST system. These changes include:
- Tax Rate Adjustments: Revising rates across sectors to encourage growth and balance government revenue.
- Industry-Specific Issue Resolution: Addressing sectoral concerns, especially in manufacturing, e-commerce, and services.
- Simplified GST Structure: Streamlining processes to ease compliance and reduce refund delays.
- Enhanced Taxpayer Services: Upgrading digital infrastructure for better tracking and support.
- Anti-Evasion Measures: Strengthening compliance checks on high-risk transactions.
- Sectoral Incentives: Lower GST rates for green energy and digital services to encourage investment.
- Future Policy Review: Establishing a roadmap for regular policy reviews to adapt to economic changes.
What is covered Further:
Extension of the RCM list
Extension of the exemption list
Changes in the rates of some of the goods and services
Clarifications issued Regarding certain ambiguities
Changes in GST Rates on Certain Items:
| S.No. | Particulars | Previous rate | Amendment | Clarification, if any |
|---|---|---|---|---|
|
1 |
Extruded or Expanded Products savoury or salted, other than un-fried or un-cooked snack pellets by whatever name called, manufactured through process of extrusion |
18% |
12% |
Rate of 5% will continue un-
fried or un-cooked snack
pellets. |
|
2 |
Classification of seats meant for four
wheeled cars and two-wheelers |
18% |
28%* |
|
|
3 |
Transportation of passengers by air in a
helicopter on a seat share basis |
12% |
5% |
In case the helicopter is chartered it will still attract 18% GST. |
|
4 |
GST on Cancer drugs Namely
|
12% |
5% |
|
* Earlier bike seats were charged at 28% and car seats were charged 18% now both are charged at 28%
Extension of Exemption list
The following are inserted in the exemption list:
• Metering Services:
Providing metering equipment on rent, Testing meters, transformers, capacitors, etc., Releasing electricity connections, shifting meters or service lines, Issuing duplicate bills, and other incidental or ancillary services related to electricity
• Research and development:
A Government Entity, A research association, university, college, or other institution, which is notified under clauses (ii) or (iii) of section 35(1) of the Income Tax Act, 1961. provided that the institution is notified under section 35(1) of the Income Tax Act at the time of the supply of research and development services.
• Affiliation Services:
A Central or State Educational Board, A Council, or any similar body. to schools that are, Established, owned, or controlled by the Central Government, State Government, Union Territory, local authority, Governmental authority, or Government entity.
INSERTIONS
The following are inserted to RCM and TDS list:
1. Metal scrap
1.1 RCM:
• This amendment modifies Notification No. 4/2017-Central Tax (Rate), dated June 28, 2017.
• A new entry is added to the notification’s table, specifying metal scrap under HS codes 72
to 81.
• It states that if metal scrap is supplied by an unregistered person to a registered person, the reverse charge mechanism applies.
1.2 TDS:
• On October 9, 2024, the government issued Notification No. 25/2024-CT, mandating TDS compliance for metal scrap supplies under GST. From October 10, 2024, any registered person receiving metal scrap (Chapters 72 to 81 of the Customs Tariff Act) must deduct TDS at 2% if the transaction value exceeds ₹2,50,000.
2. Immovable Property:
• A new entry, “5AB,” has been introduced under Notification No. 09/2024-Central Tax (Rate).
• The entry relates to renting of “any immovable property”*, excluding residential dwellings.
• It applies when the supplier of the rental service is an unregistered person.
• The recipient of the rental service must be a registered person.
*Initially it is mentioned as “any property”. Later through Corrigendum G.S.R. 652(E) dated 22-10-2024 it has been changed to “any immovable property”
OTHER CLARIFICATIONS
• GST rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines
for Railways:
• Air conditioning machines under HS 8415 are excluded from being classified as “parts” under HS 8607 according to the Customs Tariff Act, 1975. To remove any doubt, it is explicitly clarified that Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways are classified under HS 8415 with a 28% GST rate.
• GST on the Directorate General of Civil Aviation (DGCA) approved flying
training courses conducted by Flying Training Organizations approved by
the DGCA:
• Under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), educational services provided by institutions are exempt from GST.
• Since these courses are approved by the DGCA and include the requirement for completion certificates, they are classified as educational services and are therefore exempt from GST under the mentioned notification.
• Ancillary services Related to GTA :
• Ancillary services provided by GTAs during the transportation of goods (such as loading/unloading and packing/unpacking) will be treated as a composite supply of transport services.
• Regularizing the payment of GST for services rendered by film distributors:
• Prior to 01.10.2021, GST was 18% for “Motion Picture, videotape, and television programme distribution services” under Heading 9996, and 12% for intellectual property rights under Heading 9973, both covering film licensing. The 45th GST Council meeting on 17.09.2021 recommended a uniform 18% GST rate from 01.10.2021.
• Applicability of GST on the service of affiliation provided by universities to
colleges:
Clarifications have been sought on whether GST applies to affiliation services provided by universities to colleges. These services ensure that colleges meet the required standards in terms of infrastructure, faculty, and other criteria to conduct courses and grant degrees under the university’s name. Following the 54th GST Council’s recommendation, it has been clarified that affiliation services are not exempt from. An 18% GST is applicable to these services provided by universities.
