Key Updates from the 53rd GST Council Meeting: Important GST Updates and News

The 53rd GST Council meeting, held on June 22, 2024, in New Delhi, was a landmark event, introducing significant changes to GST regulations. Led by Union Finance Minister Nirmala Sitharaman, this meeting was the first after the 2024 Lok Sabha elections, bringing together finance ministers from all states and UTs to discuss and approve key proposals.

Pre-Meeting Context

Before diving into the specifics of the meeting, it's important to note the context. The last GST Council meeting occurred nearly eight months ago. In preparation for this meeting, Union FM had a pre-budget consultation with various states and UTs. As of December 31, 2023, less than 1.96% of GST taxpayers received notices under GST, highlighting an effort to streamline compliance and enforcement.

Major Highlights from the 53rd GST Council Meeting

Ease of Compliance Burden

GSTR-1A Implementation: The GST Council approved a new form, GSTR-1A, which allows taxpayers to amend GSTR-1 details within the same tax period. This aims to ensure more accurate reporting before filing GSTR-3B.
Reporting B2C Supplies: The threshold for reporting B2C interstate supplies invoice-wise in Table 5 of GSTR-1 was reduced from ₹2.5 lakh to ₹1 lakh, improving transparency and compliance.
Revised GSTR-4 Due Date: The due date for filing GSTR-4 by composition taxable persons has been extended from April 30 to June 30, 2024, providing additional time for compliance.

Tax Collected at Source (TCS) Rate Reduction

The TCS rate for Electronic Commerce Operators (ECOs) was reduced from 1% to 0.5%, alleviating the financial burden on e-commerce businesses.

Mandatory GSTR-7 Filing

GSTR-7 must now be filed mandatorily, even if no TDS is deducted, and no late fee will be charged for nil filing, ensuring better compliance without penalizing taxpayers unnecessarily.

Annual Return Exemption

Taxpayers with an aggregate annual turnover of up to ₹2 crore are exempted from filing annual returns in GSTR-9/9A for FY 2023-24, reducing the compliance burden on small businesses.

Input Tax Credit (ITC) Changes

The time limit to avail ITC for invoices or debit notes in any GSTR-3B filed up to November 30, 2021, was retrospectively applied from July 1, 2017. This amendment aims to simplify the ITC claiming process.

Interest and Penalty Waivers

Under a new Section 128A, the GST Council waived interest and penalties for demand notices issued under Section 73 of CGST for fiscal years 2017-18, 2018-19, and 2019-20, provided the taxpayer pays the full amount by March 31, 2025.

Time Limits for Demand Notices

A common time limit was set for issuing demand notices and orders under Sections 73 and 74, simplifying the process and ensuring consistency.

Pre-Deposit for Appeals

The pre-deposit requirement for filing appeals was reduced, with new caps set at ₹40 crores for appeals to the Appellate Authority and ₹40 crores for appeals to the GST Tribunal.

GST Rate Rationalisation and Changes

Several GST rate changes and exemptions were announced:

Goods:

Parts of poultry keeping machinery and milk cans now attract a 12% GST.
Carton boxes, solar cookers, and various types of sprinklers are also taxed at 12%.
Imports of parts and components for aircraft maintenance, repair, and overhaul activities are subject to a 5% IGST.

Services:

Services provided by Indian Railways, such as platform tickets and battery-operated car services, are exempt from GST.
Hostel accommodation services up to ₹20,000 per person per month are exempt if they meet specified conditions.

Compliance and Legal Changes

New Section 11A: This provision allows regularisation of non-levy or short levy of GST due to common trade practices.
Amendments to Sections 107 and 112: The maximum amount for pre-deposit for filing appeals before appellate authorities has been reduced, making the appeals process more accessible.
Biometric-based Aadhaar Authentication: This will be rolled out for GST registration on an all-India basis in a phased manner, enhancing the security and authenticity of the registration process.

Press Release and Future Expectations

For a detailed account of the decisions made, the complete press release issued by the Finance Ministry post-meeting is available for download. Future expectations from the GST Council include further rate rationalisation, the inclusion of natural gas and ATF under GST, addressing compliance issues, and implementing new ISD rules.

Conclusion

The 53rd GST Council meeting introduced several crucial changes aimed at simplifying compliance, reducing tax burdens, and streamlining GST processes. These updates reflect the Council's commitment to making GST more taxpayer-friendly while addressing key issues across various sectors. Stay tuned for more updates and detailed guidelines as they are released by the GST Council.