Gist of important recommendations made in 55th Council Meeting.

A. Rates/ exemption on goods and services:

Council has recommended exemption on:

• Gene Therapy

• System, sub-systems, parts, tools, equipments, software etc. meant for Long Range Surface to Air Missile system

• Penal charges levied and collected by banks/ NBFCs for non-compliance with loan terms

Fortified Rice Kernel (HSN – 1904) – Taxable at 5%

Rate increased from 12% to 18% on sale of all old and used vehicles including EVs

Following clarifications to be provided:

• ACC blocks containing more than 50% fly ash will attract 12% GST under HSN 6815.\

• Pepper supplied by agriculturist whether fresh green or dried pepper not liable to GST

• Popcorn with salt and spices which are pre-packaged and labelled – Taxable at 12%

• Popcorn with salt and spices other than pre-packaged and labelled – Taxable at 5%

• opcorn mixed with sugar like caramel popcorn – Taxable at 18%

B. Others:

1. No tax payable on transaction of vouchers - Relevant changes to be made in law. Other services related to distribution of vouchers or advertisement, co-branding, marketing, etc. of vouchers would continue to be taxable;

2. Unredeemed vouchers not taxable even if considered as income in books of accounts;

3. Explanation regarding motor vehicles that ground clearance to be considered in unladen conditions shall be applicable w.e.f. 26-07-2023 – It will help to end ongoing litigation for the past period;

4. No proportion reversal of ITC by E-Commerce Operator in respect of supplies where tax payable under Section 9(5);

5. Pre-deposit to reduce from 25% to 10% where only demand of penalty is involved (To be in par with cases involving tax amount);

6. To amend the provision under GST in respect of functionality of Invoice Management System (IMS);

7. Trace and track mechanism to be introduced for certain items prone to tax evasion. A QR code would be used to track the movement of such goods through entire supply chain;

8. Composite taxpayers not to pay tax under RCM on renting of commercial property.

Trust the above is useful.

Regards
CA Jai Prakash

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