GST Rate Changes 2024: The Goods and Services Tax (GST) Council, in its 55th meeting held in Jaisalmer under the chairpersonship of Finance Minister Nirmala Sitharaman, has announced several significant tax reforms aimed at simplifying compliance and providing targeted relief. Here’s a comprehensive breakdown of the key changes:
Products Getting Cheaper
- Fortified Rice Kernel (FRK)
- GST rate reduced to 5%
- Aims to make fortified rice more accessible and affordable
- Gene Therapy
- Complete GST exemption
- Move to improve accessibility of critical medical treatments
- Motor Vehicle Accident Fund
- GST exempted on contributions from third-party motor vehicle premiums
- Applies to contributions made by general insurance companies
- Voucher Transactions
- Clarified that no GST applicable
- Not considered as supply of goods or services
- Bank and NBFC Penal Charges
- No GST on penalties levied for loan term non-compliance
- Provides clarity for financial institutions and borrowers
Other Significant Changes
- Pre-deposit Requirements
- Reduced pre-deposit amount for filing appeals
- Applicable when order involves only penalty amounts
- Old and Used Vehicles
- GST rate increased from 12% to 18%
- Includes all vehicles including EVs, except specified categories
- Commercial Property Rentals
- Composition levy scheme participants excluded from certain provisions
- Affects renting of commercial/immovable property
Special Exemptions
- LRSAM System Equipment
- IGST exemption extended
- Covers systems, sub-systems, and related equipment
- IAEA Equipment
- IGST exempted on imports
- Applies to inspection team equipment and consumable samples
- Food Programs
- 5% concessional GST rate extended
- Covers food preparations for government programs targeting economically weaker sections
Clarifications
- Autoclaved Aerated Concrete Blocks
- 12% GST for blocks with over 50% fly ash content
- Falls under HS 6815
- Agricultural Products
- GST exemption clarified for pepper and raisins
- Applicable when supplied by agriculturists
- Pre-packaged and Labelled Goods
- Definition amended
- Covers retail commodities up to 25 kg or 25 litres
- Ready-to-eat Popcorn
- 5% GST for non-pre-packaged
- 12% GST for pre-packaged variants
The Council’s decisions reflect a balanced approach to tax rationalization while addressing specific sector needs and promoting ease of doing business. These changes aim to streamline the GST framework while providing targeted relief to various stakeholders across the economy.
Implementation dates for these changes will be notified separately by the government, and businesses are advised to align their compliance processes accordingly.
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