At the 53rd GST Council Meeting, several key recommendations were made concerning taxation, ITC claims, and demand notices.
The Council suggested implementing a consistent 12% GST rate on all types of milk cans, including those made of steel, iron, and aluminum, regardless of their use, to avoid any potential disputes. Additionally, it proposed waiving interest on penalties associated with tax demand notices.
Finance Minister Nirmala Sitharaman announced these decisions, emphasizing that the uniform 12% rate on milk cans is intended to be comprehensive, applying to all types and uses.
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The Council also decided to exempt GST on services provided by Indian Railways, such as platform tickets. Items like carton boxes and solar cookers will now be subject to a 12% GST rate. Moreover, all types of sprinklers, including fire sprinklers, will also attract a 12% rate.
Hostels for students located outside educational institutions are exempt from GST, provided the monthly rent does not exceed Rs 20,000 per person and the minimum stay is 90 days.
Finance Minister Nirmala Sitharaman also announced an extension for the GSTR-4 filing deadline, which will now be June 30 starting from FY 2024-25. Additionally, the GST Council introduced a new functionality in GSTR-1A to address any omissions in GSTR-1 filings.
For demand notices from the financial years 2017-18, 2018-19, and 2019-20, the Council recommended waiving interest and penalties if the tax is paid by March 31, 2025.
To reduce litigation, the GST Council recommended setting a threshold for filing appeals: Rs 20 lakh for the appellate tribunal, Rs 1 crore for the High Court, and Rs 2 crore for the Supreme Court.
The Council’s decision to waive interest and penalties for tax demands under notices issued under Section 73, if paid by March 31, 2025, is expected to significantly reduce unnecessary litigations related to GST. This measure is particularly relevant for cases involving interpretative issues and uncertainties that arose during the implementation of GST. The details of this amnesty will be important, especially regarding its application to cases where interest or penalties have already been paid or where taxes were paid before the issuance of notices.
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Finance Minister Nirmala Sitharaman announced a nationwide rollout of biometric authentication in a phased manner to combat fake invoicing. This initiative aims to eliminate fake registrations and fraudulent credits.
The 53rd GST Council meeting, chaired by the Finance Minister, took place at Bharat Mandapam in New Delhi. Participants included MoS Finance Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha, as well as finance ministers from various states and Union Territories with legislatures, along with senior officers from the union and state governments.
Saturday’s GST Council meeting was held after an eight-month hiatus, with the previous 52nd meeting taking place on October 7, 2023. The next Council meeting is scheduled for mid-August to address the remaining agenda items.
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