GST Council’s 55th Meeting Announces Key Tax Changes

On 21st December, 2024, the 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman in Jaisalmer, introduced several impactful measures on tax rates, trade facilitation, and compliance streamlining.

The GST Council reduced the GST rate on Fortified Rice Kernel (FRK) to 5% and granted full exemptions on gene therapy and contributions to the Motor Vehicle Accident Fund from motor insurance premiums.
It clarified that vouchers are not classified as goods or services and will attract no GST, with further simplifications planned for related provisions.
Penal charges by banks and NBFCs for non-compliance with loan terms were exempted from GST, streamlining financial operations.
The pre-deposit amount for penalty-related GST appeals was reduced to 10%, down from the earlier 25%, making the appeals process more accessible.
Exemptions and concessional rates were extended for certain government welfare program inputs, including food used for free distribution, ensuring ongoing support for social initiatives.
Measures to enhance compliance included introducing a Track and Trace Mechanism to prevent tax evasion and mandating accurate state details for online services provided to unregistered recipients.
Amendments to the CGST Act and Rules were proposed to simplify input tax credit claims, address voucher-related issues, and facilitate reconciliation statements.