Key Highlights Points From The 52nd GST Council Meeting

The 52nd GST Council Meeting Happened Today, Chaired by Finance Minister Nirmala Sitharaman at Sushma Swaraj Bhawan in New Delhi. The Finance Minister Announced the Decisions After the Meeting.

The meeting was chaired by Smt. Nirmala Sitharaman, the Union FM, attended by MoS (F) Shri Pankaj Chaudhary, the Revenue Secretary, Chairman CBIC, Member CM, Member GST, Member TP, and senior officers from the Union Government and States.

In the Meeting, the GST Council Decided to Lower the GST Rate on Molasses from 28% to 5% and Granted an Exemption for Alcohol Intended for Human Consumption from GST.

This meeting occurred about two months after the 51st GST Council meeting on August 2, 2023. 

Here are the key updates from the 52nd GST Council meeting:

1. Constitution of GSTAT: The meeting recommended amendments to the law to allow a maximum age limit of up to 70 years for the President and 67 years for members of the GSTAT. The minimum age limit is 50 years, and advocates with up to 10 years of experience can be appointed as judicial members of GSTAT.

2. GST Rates on Millet Flour: Nil GST rate is applicable for selling millet flour in powder form blended with any other atta, with at least 70% composition of millets when sold unpackaged or in loose form. For pre-packaged or labeled millet flour, a 5% GST rate applies.

3. Taxation of Extra Neutral Alcohol (ENA): The GST Council clarified that states have no authority to tax ENA (used in liquor for human consumption) after the 101st Constitutional Amendment. The power to tax ENA rests with the GST Council, but it has allowed states to tax ENA.

4. GST on Molasses: GST on molasses has been reduced from 28% to 5%, benefiting sugarcane farmers and reducing cattle feed costs.

5. HSN Code for Rectified Spirit: A separate HSN code has been introduced for rectified spirit for industrial use, with an 18% tax rate on ENA for industrial use.

6. GST Exemption for Foreign-Flagged Vessels: Foreign-flagged/owned or foreign-going vessels will be exempted from 5% GST during the upcoming winter season if they operate along the Indian coast to promote tourism.

7. GST Amnesty Scheme: An appeal filing time extension has been granted until January 31, 2024, for orders passed until March 2023. An additional 2.5% pre-deposit is required for the extended period, which can be paid from the electronic cash ledger.

8. GST on Zari: Zari will be taxed at a 5% rate instead of 18%.

9. GST on Job Work Services: Job work services used in processing barley into malt for food products will have a 5% GST rate, while those used in the production of alcoholic beverages will have an 18% rate.

10. Exemptions for Government Authorities: Government Authorities are exempted from GST for services related to water supply, public health, sanitation, conservancy, solid waste management, and slum improvement and upgradation, including composite services involving up to 25% of these services. Clarification is provided regarding eligibility for the same exemptions for District Mineral Foundation Trust (DMFT) as other government authorities.

11. Forward Charge on Indian Railways: All services provided by Indian Railways will be subject to forward charge, with input tax credit (ITC) available for discharging liabilities.

12. Provisional Attachment of Property: A one-year time limit for the provisional attachment of property will be included in the GST Rules to prevent practical difficulties when releasing property from banks after one year.

13. No Discussion on GST Rate Changes or ITC Recoveries: The meeting did not include discussions on GST rate adjustments or input tax credit (ITC) recoveries.

14. GST on Gaming Companies: Eighteen states have passed amendments to impose 28% GST on gaming companies starting from October 1, 2023, along with the GST Rules. Thirteen states have yet to pass similar amendments.

15. GST on Corporate Guarantees: The Revenue Secretary clarified that when a director provides a corporate guarantee to a company, it won't attract GST unless there is specific consideration for it. However, if a company provides a corporate guarantee to its subsidiary, 1% of the total guaranteed amount is deemed as value and attracts an 18% GST rate."

Also Read: Important Update from the Income Tax Department: Extension of ITR Form Due Dates

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