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The 50th Meeting of the GST Council took place on Tuesday, July 11, in New Delhi, commemorating a significant milestone in the journey of Goods and Services Tax (GST). Led by Union Finance & Corporate Affairs Minister Nirmala Sitharaman, the council made several key recommendations regarding changes in GST tax rates, measures for facilitation of trade, and streamlining of compliance processes.

In terms of changes in GST tax rates, the council put forward several recommendations for both goods and services. Notable changes in GST rates for goods include reducing the rate on uncooked/unfried snack pellets from 18 percent to 5 percent.

The council also decided to exempt Integrated Goods and Services Tax (IGST) on imported medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases listed under the National Policy for Rare Diseases.

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The list of eligible drugs will be determined by centres of excellence and imported as and when required. Similarly, certain food items for medical purposes will also be exempted from GST.

Moreover, amendments were introduced to incorporate several items, including Linz-Donawitz (LD) slag, fish soluble paste, and imitation zari thread, within the revised GST rates framework. These adjustments were implemented to promote their utilisation, environmental protection, and facilitate smoother trade operations. Notably, the rate for LD slag was reduced from 18 percent to 5 percent, while the rates for imitation zari thread/yarn and fish soluble paste were both reduced from 12 percent to 5 percent.

In the services sector, the council recommended extending the GST exemption on satellite launch services to private sector organisations such as ISRO, Antrix Corporation Limited and New Space India Limited (NSIL), in order to promote start-ups.

Changes were also proposed to simplify compliance for Goods Transport Agencies (GTAs) and clarify the taxability of services provided by directors of companies to their respective companies.

The council further addressed the second report of the Group of Ministers (GoM) on Casinos, Race Courses, and Online Gaming. Recommendations were made to tax all three activities—casinos, horse racing, and online gaming—at a uniform rate of 28 percent, with no distinction between games of skill and chance. This decision is aimed at creating a uniform tax rate for these activities. Currently, these services attract an 18 percent GST.

The GST on food and beverages served in cinema halls will be 5 percent, and not 18 percent. This decision comes after the Multiplex Association of India raised concerns about the confusion surrounding the taxation of food and drinks in cinema halls.

Also read: GST on food and drinks served in cinemas to be 5%, exemption for medicines for cancer, rare diseases

The rate on uncooked/unfried snack pellets will be reduced to 5%, and the payment of GST on these pellets in the past period will be regularized on an "as is basis."

IGST on Dinutuximab (Quarziba) medicine will be exempted when imported for personal use.

IGST exemption on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases listed under the National Policy for Rare Diseases, 2021 will be granted when imported for personal use, subject to existing conditions. Similarly, IGST exemption will also apply to FSMP imported by Centres of Excellence for Rare Diseases or any person or institution recommended by these centers.

Supply of raw cotton, including kala cotton, by agriculturists to cooperatives will be taxable under the reverse charge mechanism, and issues related to the past period will be regularized on an "as is basis."

GST on imitation zari thread or yarn will be reduced from 12% to 5%, and payment of GST related to this matter in the past period will be regularized on an "as is basis."

GST rate on LD slag will be reduced from 18% to 5% to promote its better utilization and environmental protection.

Matters relating to trauma, spine, and arthroplasty implants prior to 18.07.2022 will be regularized on an "as is basis" due to genuine interpretational issues.

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GST rate on fish soluble paste will be reduced from 18% to 5%, and payment of GST on fish soluble paste in the past period will be regularized on an "as is basis."

Matters relating to dessicated coconut for the period 1.7.2017 to 27.7.2017 will be regularized on an "as is basis" due to genuine interpretational issues.

The earlier ad valorem rate applicable on 31st March 2023 will be notified for the levy of Compensation Cess on pan masala, tobacco products, etc., where it is not legally required to declare the retail sale price.

RBL Bank and ICBC Bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum. The list of eligible banks/entities for this exemption will be updated as per Annexure 4B (HBP) of Foreign Trade Policy 2023.

Consequential changes will be made in notifications in accordance with the new Foreign Trade Policy 2023.

Issues related to GST on plates and cups made of areca leaves prior to 01.10.2019 will be regularized.

Issues related to GST on biomass briquettes for the period 01.7.2017 to 12.10.2017 will be regularized.

It has been decided that GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited and New Space India Limited (NSIL) may be extended to such services supplied by organisations in private sector also to encourage start ups.

It is clarified that services provided by a director to a company in his private or personal capacity such as renting of immovable property to the company or body corporate are not taxable under Reverse Charge Mechanism. Only those services supplied by a director of company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017.

(Edited by : Anand Singha, Pradeep John)

First Published:Jul 11, 2023 10:27 PM IST