Sun Dec 22 05:22:19 UTC 2024: **GST Council Announces Key Tax Relief Measures**

NEW DELHI – The 55th Goods and Services Tax (GST) Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, concluded Saturday with a series of recommendations aimed at easing the tax burden on individuals and businesses. The Council made several significant clarifications and rate adjustments.

Key decisions include:

* **Exemption on Penal Charges:** Banks and Non-Banking Financial Companies (NBFCs) will no longer levy GST on penal charges collected from borrowers for loan defaults.

* **Reduced GST on Fortified Rice Kernel (FRK):** The GST rate on FRK, a staple supplied to underprivileged populations through the Public Distribution System (PDS), has been reduced to 5%.

* **Exemption on Motor Vehicle Accident Fund Contributions:** General insurance companies are exempted from GST on contributions to the Motor Vehicle Accident Fund.

* **Clarification on Vouchers:** GST will not apply to voucher transactions, simplifying the existing provisions.

* **Appeal Pre-Deposit Reduction:** The pre-deposit amount required for filing GST appeals involving only penalties has been reduced.

* **Increased GST on Used Vehicles:** The GST rate on the sale of most used vehicles, including electric vehicles (EVs), will increase from 12% to 18%. Certain exceptions, previously taxed at 18%, remain unchanged.

* **Clarifications on Various Goods and Services:** The Council clarified the GST applicability on various items, including Autoclaved Aerated Concrete (AAC) blocks, pepper, raisins, and ready-to-eat popcorn, depending on their composition and packaging. The definition of pre-packaged and labelled items has also been amended for better clarity.

The meeting was attended by senior government officials and representatives from various states. These changes are expected to significantly impact businesses and consumers across the country.

Read More