55th GST Council Meeting:
The Finance Minister chaired the 55th Goods and Services Tax (GST) Council meeting.
- GST council decided to raise the rate of tax to 18% from 12% on all used EV sales, just as in case of non-electric vehicles.
- GST will apply only to the margin value (difference between purchase and selling price, adjusted for depreciation if claimed) in case of business sales. No GST applies to individual-to-individual sales.
- No GST applies to penal charges by banks and non-banking financial companies (NBFCs) for loan term violations.
- Payment aggregators handling payments of less than Rs 2,000 will be eligible for an exemption.
- This exemption does not extend to payment gateways or other fintech services unrelated to fund settlement.
- GST council did not agree on bringing ATF under the ambit of GST because states refused to accept it.
- States see ATF as part of the crude petroleum diesel basket, saying that it alone cannot be taken out.
- 5 products i.e., crude oil, petrol, diesel, ATF and natural gas were kept out of purview of GST.
- The central government levies excise duty on them and states levy VAT.
- Black pepper and raisins supplied directly by farmers will be exempt from GST.
- Gene therapy is fully exempt from GST, and Integrated GST exemption on surface-to-air missiles is extended.
- Reduced compensation cess rate to 0.1% on supplies to merchant exporters.
- This Cess is collected on the supply of select goods and or services to compensate the states for any revenue loss on account of implementation of GST.
- GST Council clarified (no new tax imposition) that caramelized popcorn is taxed at 18% GST. Ready-to-eat popcorn with salt and spices attracts 5% GST if not pre-packaged and labeled, and 12% if pre-packaged and labeled.
- Caramelised popcorn is classified as sugar confectionery, and attracts 18% GST while salted popcorn is a namkeen and subject to 5% GST.
