GST Council Meeting Highlights: New GST invoice system from October 1; Car seat tax hikes to 28%

The GST Council has decided to introduce the Reverse Charge Mechanism (RCM) on the supply of metal scrap when an unregistered person sells to a registered person. Once the supplier crosses the threshold limit, they will be required to register for GST. Even if the supplier remains under the threshold, the recipient, who is liable to pay under RCM, must pay the tax. Additionally, a 2% Tax Deducted at Source (TDS) will be applied on the supply of metal scrap in business-to-business (B2B) transactions by registered suppliers.

Finance Minister Nirmala Sitharaman announced that a committee of secretaries, led by the Additional Secretary (Revenue), will be established to address the issue of the Integrated Goods and Services Tax (IGST), which is currently facing a negative balance. The committee will explore measures to recover funds from states in order to rectify the situation.

Finance Minister Nirmala Sitharaman announced that a committee of secretaries, led by the Additional Secretary (Revenue), will be established to address the issue of the Integrated Goods and Services Tax (IGST), which is currently facing a negative balance. The committee will explore measures to recover funds from states in order to rectify the situation.

Finance Minister Nirmala Sitharaman stated that no decision has been made yet regarding the rationalisation of GST slabs. She also mentioned that several states have expressed interest in hosting GST Council meetings. In response, the Council is considering the possibility of holding future meetings in other states and will make a decision on this soon.

The GST Council has decided to implement a new system for managing invoices between businesses and customers starting from October 1. This move aims to streamline the process and ensure better compliance. Revenue Secretary Sanjay Malhotra mentioned that once the outstanding debt is repaid, the GST compensation cess may be discontinued. Additionally, the Council plans to increase the tax rate on car seats from 18% to 28%. Furthermore, the Council will reassess the tax implications on electric vehicle (EV) charging stations, a matter that remains under review.

Revenue Secretary Sanjay Malhotra clarified that the 54th GST Council meeting did not discuss the exemption of payment aggregators from paying tax on online payments. The topic remains unresolved for future deliberation.

Finance Minister Nirmala Sitharaman announced that the renting of commercial properties will now fall under the reverse charge mechanism (RCM), shifting the tax liability to the recipient.

Additionally, Revenue Secretary Sanjay Malhotra stated that the import of services by foreign airline companies will be exempt from GST, providing relief to the aviation sector.

Finance Minister Nirmala Sitharaman announced a reduction in the GST rate on namkeen, which will take effect prospectively. Additionally, GST on certain cancer drugs has been significantly slashed as part of the decisions made during the 54th GST Council meeting.

The Council has also decided to exempt universities and educational institutions, established by a law of the Central or State government or those receiving income tax exemptions, from GST.

Finance Minister Nirmala Sitharaman announced that the GST Council has agreed to form a Group of Ministers (GoM) to study and decide on the future of the compensation cess, which is set to cease after March 2026. The total cess collection stands at Rs 8,66,706 crore, according to the Finance Minister.

Additionally, a new GoM on GST rate reduction for medical health insurance has been set up, with plans to submit its report by the end of October.

Finance Minister Nirmala Sitharaman announced that the Group of Ministers (GoM) on health insurance is expected to present its report by the end of October. A final decision on the matter is anticipated during the GST Council’s November meeting.

Finance Minister Nirmala Sitharaman highlighted a remarkable 412% increase in revenue from online gaming, amounting to Rs 6,909 crore in just six months. A status report on online gaming and casinos was also presented during the GST Council meeting, outlining developments in these sectors.

Finance Minister Nirmala Sitharaman, while addressing the press briefing, confirmed that the Group of Ministers (GoM) on rate rationalisation has submitted its status report. She also mentioned that the GST Council made several significant decisions during the meeting.

Union Finance Minister Nirmala Sitharaman is scheduled to hold a press conference shortly, where she will address key discussions from the recent GST council meeting. Stay tuned for updates on the announcements and decisions impacting the Goods and Services Tax (GST) structure.

The GST Council Meeting is over and the announcement will be made shortly.

The 54th GST Council meeting arrived at a ‘broad consensus’ and agreed on owering GST on both health and life insurance premiums, stated a report. However, modalities have to be worked upon to reach a final decision, which is expected at the next GST Council meeting, the report stated. “There was broad consensus for GST on health and life insurance premiums to be reduced, but modalities will be decided in the next Council meeting,” a source told The Indian Express.

The GST Council has decided to maintain the existing rules for online gaming, casinos, and racecourses, sources told CNBC-TV18.

Sandeep Agrawal, Director and Founder of Teamlease Regtech, said, “In the 54th GST Council Meeting, rate rationalizations were a key focus, with discussions centered on simplifying the current GST rate structure. The Council, led by the Finance Minister, reviewed the potential for merging or adjusting the existing slabs of 5%, 12%, 18%, and 28% for now. Another significant topic was the review of the GST levied on insurance premiums, particularly for health and life insurance, which currently stands at 18%. The gaming industry also faced scrutiny, which has an imposition of 28% GST on online gaming, casinos, and horse racing. The proposed changes could create a more straightforward and predictable GST framework, enhancing compliance and reducing complexities for businesses. Simplifying the rate structure could lower administrative burdens and support industries like insurance by potentially adjusting high tax rates that impact consumer costs. However, maintaining high taxes on sectors like online gaming reflects the government’s caution in balancing revenue needs with industry growth. The Council’s cautious approach indicates a preference for gradual adjustments rather than sweeping changes, with a focus on stabilizing the fiscal landscape while considering future reforms.”

The 54th GST Council meeting is continuing and is expected to continue for another one hour. One of the key topics that industry observers are watching out for is GST on insurance premiums, especially term premiums. The industry has been rallying for a reduction in this rate.

The 54th GST Council meeting is underway in New Delhi. A look at the key proposals that are expected to be discussed at the GST meet –

-GST Compensation Cess – The council is likely to provide some clarity on the topic and sources suggest that the cess may be extended to the next financial year- FY26

-GST on insurance premium – The insurance industry has been lobbying for a relook on the GST rates, especially for term insurances.

Addressing media a few days ago Finance Minister Nirmala Sitharaman clearly ruled out possibility of any ‘friction’ between the states and the States over the existing GST rates. She highlighted that the federal structure in the GST framework needs to be respected and the pointed out that States and the Centre need to work together to promote development.

Referring to the popular demand for removal of GST on term insurance, Sandeep Pareek, Partner, Indirect Tax, BDO India said “One of the main reasons for exempting GST from term insurance products is to promote the term insurance plans, by making them more affordable to the masses. “

He believes, “GST Council may favourably consider this demand of the industry, especially if the revenue loss, due to grant of such exemption, is not major. “

The 54th GST meeting is underway in Delhi. Finance Ministers of various states are meeting the Finance Minister Nirmala Sitharaman to decide on the GST for a variety of products/sectors. The meeting is expected to continue for another two hours before a final decision is announced.

Gunjan Prabhakaran, Partner & Leader, Indirect Tax, BDO India, said, “While the Government had mentioned about a review of the rate structure on gaming after a period of six months, it was not taken up in the last meeting and can be discussed in the current meeting as a part of overall discussion on GST rates. In addition, there is a growing demand for exemption/reduction of GST rate on health and life insurance from all quarters and the GST Council is likely to consider it in the upcoming meeting.

Here are the latest pictures shared by the Ministry of Finance on Twitter:

According to CNBC TV18, the Uttarakhand finance minister said that no decision was taken on recommendation to levy 18 per cent GST on payment aggregators on income from transactions under Rs 2000. He further said that the matter is to be referred to the fitment committee.

According to the data released by the finance ministry, the gross GST collections during July rose 10.3 per cent on-year to Rs 1.82 trillion in comparison to Rs 1.74 trillion during June. Refunds issued during July stood at Rs 16,283 crore; and thus the net collections for the month came in at Rs 1.66 trillion, up 14.4% from the previous year.

According to the data released by the finance ministry, the gross goods and services tax (GST) collections in August (July transactions) rose 10 per cent on year to Rs 1.75 lakh crore. The GST collections in July (June transactions) came in at Rs 1.82 lakh crore, recording a growth of 10.3 per cent on year. With Rs 24,460 crore refunds issued during August, the net collections for the month came in at Rs 1.5 lakh crore, up 6 per cent from the year-ago month.

Rahul Agarwal, Founder and CEO, Ideal Insurance, said, “We have been waiting for relief from the 18% GST on retail health and life insurance premiums for a long time. This tax puts a heavy burden on consumers, making it harder for many to afford essential health coverage. With premiums already rising due to global health issues, the GST adds extra financial pressure, especially on middle-class families.

Exempting GST or reducing it to 5% would ease this burden, making health insurance more affordable and encouraging people to choose higher coverage policies. This change would not only improve financial security for individuals but also help the overall healthcare system by increasing coverage.

After today’s GST council meeting, where our West Bengal raised the issue of GST rate cuts, we hope other state governments will quickly support this important reform. This would ensure that vital medical coverage becomes more affordable for everyone.”

Smita Singh, Partner, S&A Law Offices, said, “The upcoming council is expected to have the online gaming on the agenda. What can be expected from a point of view of GST on online gaming companies? The GST Online gaming Industry has been eyeing on the GST Council to take note of its representations regarding the high tax rate and instead have made representations and argued that GST be calculated based on gross gaming revenue instead of the full-face value. Thus, clarity on retrospective levy of GST on online gaming will provide a lot of certainty to the online gaming companies many of whom have been served show cause notices demanding GST of thousands of crores, particularly the startups.

The Government must give a breather to the companies and look at feasibility for the entire sector by issuing a clarification and enable them to develop a suitable business model in view of the amendments and its existence. However, due to the current scenario, and the revenue involved, this issue may in all likelihood take a backseat for sometime.”

The airline companies that had received GST showcause notice include Emirates for Rs 7,550 crore, Etihad Airways for Rs 1,660 crore, Saudi Arabia Airlines for Rs 612 crore, Oman Airlines for Rs 71 crore, Thai Airways for Rs 60 crore, Qatar Airways for Rs 53 crore, Singapore Airlines for Rs 40 crore, British Airways for Rs 33 crore, and Lufthansa Air Cargo for Rs 10 crore.