The GST Council chaired by the Union Finance Minister has reviewed tax changes, including gene therapy exemptions, increased levies on used cars, and GST treatment for various goods. The council regulates and implements GST, recommending items and services, model laws, and special rates for emergencies.
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The GST Council chaired by the Union Finance Minister has reviewed tax changes, including gene therapy exemptions, increased levies on used cars, and discussed GST treatment for various goods.
Fortified Rice Kernel (FRK) now has a reduced GST rate of 5%.
Gene therapy has been exempt from GST.
The 5% GST rate applies to food inputs used in food preparations that are distributed free to economically disadvantaged people through government programs.
GST on old vehicles has been raised from 12% to 18% for the sale of old and used vehicles, including electric vehicles (EVs). However, GST is only charged on the margin (the difference between the purchase and selling prices).
Autoclaved Aerated Concrete (ACC) blocks containing more than 50% fly ash will now be charged 12% GST.
Popcorn mixed with salt and spices is subject to 5% GST if not pre-packaged and labelled, or 12% if it is. However, caramel popcorn mixed with sugar will be subject to 18% GST.
No GST will be levied on penalty charges collected by banks and NBFCs for noncompliance with loan terms.
Corporate bodies will now be required to use the Forward Charge Mechanism when providing sponsorship services.
General insurance companies will be exempt from paying GST on contributions to the Motor Vehicle Accident Fund for victims of road accidents, including hit-and-runs.
The definition of specified premises has been updated. The GST rate for restaurant services in hotels will now be determined by the 'value of supply' of accommodation in the previous fiscal year.
If the value exceeds Rs. 7,500 per unit of accommodation, the rate is 18% with Input Tax Credit (ITC), otherwise 5% without ITC. Hotels can choose to pay 18% with ITC by submitting a declaration.
Taxpayers under the composition levy scheme will be exempt from the reverse charge mechanism for renting commercial properties from unregistered persons to registered persons.
It is a constitutional body established under Article 279A of the Constitution by the 101st Constitutional Amendment Act of 2016. It came into effect in 2017.
According to Article 279A(1), the President must establish the GST Council within 60 days of the commencement of this Article.
The GST Council is a joint forum for the Centre and the States. It consists of:
It meets on a regular basis to discuss and decide on important GST-related issues. The Constitution does not specify the number of meetings per year, but it does require that the Council meet on a regular basis to discuss important issues.
A GST Council meeting requires a quorum of one-third of its members.
The GST Council makes decisions with a majority of at least three-fourths of the weighted votes of the members present and voting. The voting weightage is distributed as follows:
The GST Council is in charge of regulating and implementing GST. It recommends to both the Union and State Governments on various aspects of GST, including:
The GST Council's recommendations are not binding. In the Mohit Minerals case (2022), the Supreme Court clarified that the Centre and States have equal power to legislate on GST issues.
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PRACTICE QUESTION Q.Critically analyse how the structure and functioning of the GST Council contribute to the principle of cooperative federalism.(150 words) |
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