Highlights of 54th GST Council meeting held on 9th September 2024

A few key highlights of GST council meeting held on 9 September 2024 are as below:

1. GST Rates changes and clarification on goods

I. RCM to be applicable on supply of metal scrap by unregistered person to registered person. Further, a TDS of 2% will be applicable on the supply of metal scrap by a registered person in B to B supply.

II. Tax rate reduced from 18% to 12% on extruded or expanded product, savoury or salted other than un-fired or un-cooked snacks

2. GST rates changes/clarification on the following services

I. Location charges or preferential location charges (PLC) paid along with the consideration for construction services of residential/commercial/industrial complex before issuance of completion certificate would form part of composite supply wherein the principal supply is construction service.

II. Import of service by the establishment of a foreign airline company from a related person or any of its establishments outside India, when made without consideration, would be exempt from GST.

III. In case of renting of commercial property by an unregistered person to a registered person, GST would be payable under RCM.

IV. A suitable clarification would be issued with respect to the taxability of ancillary services like loading/unloading, packing/unpacking, transhipment, temporary warehousing etc. provided by GTA considering it as composite supply. If the said services are invoiced separately, the same will not be treated as a composite supply.

Other changes

V. To regularize the GST liability in case where the film distributor or sub-distributor acts on principal basis to acquire and distribute films for the past period prior to 1 October 2021 on 'as is where is' basis

3. Other recommendations

I. Implementation of provisions of Section 128A of CGST Act

i. Section 128A of CGST ACT, 2017 may be notified with effect from 01.11.2024

ii. Insertion of Rule 164 in CGST Rules, along with certain forms providing for procedure and conditions for availment of benefit of waiver of interest or penalty of both

iii. Council recommended to notify 31 March 2025 as the date on or before which the payment of tax may be made by registered person for availing the benefit under this section

iv. Council has recommended issuing circulars to clarify various issues related to availment of benefit under this section

II. Section 16(5) and (6) of CGST Act 2017

i. Council recommended to notify the provisions of Section 16(5) and (6) of CGST Act at the earliest

ii. Special procedure for rectification of orders may be notified for the taxpayers against whom any Order under Section 73 or Section 74 or Section 107 or Section 108 of CGST Act has been issued confirming demand for wrong availment of ITC on account of contravention of provisions of Section 16(4) of CGST Act, however such ITC is now available in terms of Section 16(5) or (6) of CGST Act and where appeal against the said Order has not been filed

iii. A circular clarifying the procedure and various issues related to implementation of said provisions would be issued

III. Clarification to be issued with respect to following

i. Clarification on the place of supply of advertising services provided by Indian advertising companies to foreign entities

ii. Clarification regarding the availability of ITC on demo vehicles by dealers of vehicle manufacturers

iii. Clarification on the place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India

4. Other relevant updates

i. GST Council has recommended to rollout B2C E-invoicing on voluntarily basis in selected Sectors and States.

ii. GST Council took note of the agenda on the enhancements being made to the existing GST return architecture including introduction of RCM ledger, an ITC reclaim ledger and an Invoice Management System.

iii. GST Council recommends Group of Ministers (GOM) on life and health insurance related GST service by end of October 2024.