The GST Council reduced the rate of compensatory cess on supplies to commercial exporters to 0.1%, aligned with the rate of GST on such supplies. The Finance Minister clarified that the GST rate on ACC blocks containing 50% fly ash will be 12%.
He also said that pepper and raisins which are directly supplied by farmers will be exempted from GST. Also, Seetha Raman clarified that payment collectors handling payments of less than Rs 2,000 would be eligible for exemption. However, he noted that the decision is not up to payment gateways or fintech companies.
The finance minister further clarified that no GST will be levied on penalty charges levied by banks and non-banking finance companies (NBFCs) on borrowers for non-compliance with loan conditions. Extension will be given in case of compensatory cess.
On the inclusion of Aviation Turbine Fuel (ATF) under GST, Seetha Raman confirmed that the decision was delayed after states raised concerns. “There will be no change in ATF tax, and no GoM will be appointed for this issue,” he said. On the issue of health insurance, the GST Council gave flexibility to the GoM to decide on reduction in GST rates. Insurance premium.
Seetha Raman noted that the GoM felt that more time was needed for a wider deliberation to determine the appropriate rate of tax on insurance premiums.
The GST Council also discussed the implementation of GST on instant commerce services, e-commerce and food delivery platforms, but no decision was taken. Seetha Raman noted that the council also considered taxing popcorn and agreed that items with added sugar should be classified separately. He clarified that salted popcorn will be taxed at 5 percent, but when sugar is added, it will fall into a different category.
On the topic of electric vehicles (EVs), Seetha Raman said the GST Council plans to promote EVs, which will be taxed at 5 percent. It confirmed that used EVs sold between individuals will not attract GST. However, if an EV is purchased, modified and resold by a company, it will be taxed at 18%.
GST will be applicable on the margin value between the purchase price and selling price of the used EV, he explained. GoM will review the decision to implement cess for disaster management funding and will also keep a close eye on health, Seetha Raman added. and insurance related issues.
However, he added that no timeline had been set for these reviews. The GST Council has not been able to reach a tax decision on Floor Space Index (FSI), and the matter is under consideration. While many important decisions were taken overall, many important issues were deferred for further analysis and discussion by the relevant committees.