• The 55th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in Jaisalmer, Rajasthan.

Highlights of Key Decisions Taken:

1. Extension for Group of Ministers (GoM):
   The Council extended the deadline for the Group of Ministers on the restructuring of the GST Compensation till 30^th June, 2025.
2. Exemptions for Payment Aggregators:
   GST exemption granted for payment aggregators handling transactions below ₹2,000. However, this does not apply to payment gateways or fintech services lacking fund settlement mechanisms.
3. No GST on Penal Charges:
   GST council clarifies that no GST is payable on “Penal charges” collected by banks and NBFCs for non-compliance with loan terms.
4. Exemption for Agricultural Products:
   Pepper whether fresh green or dried pepper and raisins when supplied by an agriculturist are now exempt under GST.
5. Clarification on Caramelized Popcorn:
   Treated at par with products containing added sugar, caramelized popcorn attracts higher GST compared to salted popcorn, which is subject to 5% GST. Now caramel popcorn would be classifiable under HS 1704 90 90 and attract 18% GST.
6. Food Delivery and Delivery Charges:
   Deliberations on GST applicability to food items and delivery charges via quick-commerce platforms or food delivery apps were deferred.
7. Taxation of Used Electric Vehicles (EVs):
   • No GST on used EVs sold by individuals.
   • Businesses selling refurbished EVs will pay 18% GST on the margin (sale price minus purchase price). Platform like car becho, car dekho etc.
8. Compensation Cess for Merchant Exporters:
   Recommended reducing the compensation cess rate to 0.1%, aligning with the GST rate for such supplies.
9. IGST Exemption on IAEA Equipment Imports:
   Exemption for all equipment and consumable samples imported by International Atomic Energy Agency (IAEA) inspection teams, subject to specified conditions.

Clarifications and Amendments:

1. Invoice Management System (IMS):
   • Legal Framework for GSTR-2B: Amendments to Section 38 of the CGST Act and Rule 60 of CGST Rules to streamline GSTR-2B generation via IMS.
   • Credit Note Reversal of ITC: Amendment to Section 34(2) of the CGST Act for ITC reversal by recipients to adjust supplier liabilities.
   • New Rule 67B: Guidelines for adjusting supplier liabilities against credit notes.
   • GSTR-3B Filing: Changes to Section 39(1) and Rule 61 ensure GSTR-3B can only be filed post-GSTR-2B availability.
2. Late Fee Clarifications:
   • Circular to clarify late fee applicability under Section 47(2) for delays in filing GSTR-9 and GSTR-9C.
3. Late Fee Waiver (2017-2023):
   • Waiver recommended for late fees on FORM GSTR-9C filings for periods 2017-18 to 2022-23, provided the reconciliation statements are submitted by March 31, 2025.
4. Pre-Deposit Reduction for Appeals:
   • Pre-deposit requirement for appeals reduced to 10% for penalty-only cases under Sections 107(6) and 112(8) of the CGST Act.

The Council’s decisions reflect its ongoing efforts to simplify compliance, address sector-specific concerns, and ensure GST efficiency.

What should be the GST rate after the Recommendations of the 55th GST Council Meeting?

1. GST Rate Reductions

Item/Service	Previous Rate	New Rate	Remarks
Fortified Rice Kernel (FRK)	18%	5%	To support nutrition programs.
Compensation Cess on Supplies to Merchant Exporters	Standard rate	0.1%	To promote exports by reducing costs.

2. GST Rate Increases

Item/Service	Previous Rate	New Rate	Remarks
Used Electric Vehicles (EVs)	5% (general EV rate)	18% (on margin value)	Applicable when sold by businesses after refurbishment.
Used Cars (Other than EVs)	12%	18%	Margin-based taxation for businesses.

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3. GST Exemptions

Item/Service	Previous Rate	New Rate	Remarks
Payment Aggregators for Transactions Below ₹2,000	Applicable rate	Exempt	Limited to aggregators; does not cover gateways/fintech services.
Gene Therapy Treatments	Applicable rate	Exempt	Promotes access to advanced healthcare.
Black Pepper and Raisins by Agriculturists	Applicable rate	Exempt	Applies only to direct supplies by agriculturists.
Penal Charges by Banks/NBFCs	Applicable rate	Exempt	For penal charges on non-compliance of loan terms.
IAEA Equipment Imports	Applicable rate	Exempt	Subject to specified conditions for inspection teams.

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4. Clarifications on GST Applicability

Item/Service	Rate	Remarks
Caramelized Popcorn	Treated as added sugar product	GST rate higher than 5% (salted popcorn rate).
Quick Commerce Food Delivery Charges	Deferred Decision	Clarification awaited on rate applicability.