Latest GST Clarifications: Key Exemptions, Tax Rules & Regularizations from 55th GST Council Meeting

CA Jaydeep Babubhai Vadher | Last updated: 01 February 2025

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The 55th GST Council meeting has brought several clarifications regarding Goods and Services Tax applicability, exemptions, and regularization. Key updates include that penal charges by regulated entities are not subject to GST, and payment aggregators facilitating small card transactions are exempt. The circular also addresses GST on R&D services by government entities, skilling services, facility management for MCD, DDA's GST status, renting of commercial property, support services by electricity utilities, and services provided by Goethe Institute/Max Mueller Bhawans, with specific dates for exemptions and regularization of past payments.

The Government of India, Ministry of Finance, issued Circular No. 245/02/2025-GST to provide clarifications on the applicability of GST on specific services based on the recommendations of the 55th GST Council meeting held on 21st December 2024. The circular addresses various aspects of GST applicab

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FAQ :

No, penal charges levied by regulated entities like banks and NBFCs, as directed by the RBI, are not subject to GST. They are considered deterrents for contract breaches rather than consideration for tolerating an act.

Payment Aggregators (PAs) facilitating transactions up to ₹2,000 via card-based payments are exempt from GST, as they fall under the definition of 'acquiring bank' for GST purposes. Payment Gateways (PGs) do not qualify for this exemption.

Research & Development services provided by government entities have been exempted from GST effective 10.10.2024. GST paid on such services from 01.07.2017 to 09.10.2024 is regularised on an 'as is where is' basis.

The GST exemption for skilling services under NSDC, which was withdrawn on 10.10.2024, was reinstated on 16.01.2025. GST paid between 10.10.2024 and 15.01.2025 is regularised.

No, the Delhi Development Authority (DDA) is not considered a 'local authority' under the CGST Act, 2017. Therefore, services provided by DDA to business entities are not subject to the reverse charge mechanism (RCM).

Renting of commercial property by an unregistered person to a registered person was brought under the reverse charge mechanism (RCM) from 10.10.2024. Composition taxpayers are excluded from this rule from 16.01.2025, and GST paid between 10.10.2024 and 15.01.2025 is regularised.

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CA Jaydeep Babubhai Vadher

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"Knowledge is power, but continuous learning is supremacy." - CA Jaydeep B. Vadher As a Chartered Accountant with over 8 years of experience, I specialize in delivering comprehensive financial services that drive business growth and ensure regulatory compliance. My expertise spans taxation, statutory and tax audits, f ... Read more

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Latest GST Clarifications: Key Exemptions, Tax Rules & Regularizations from 55th GST Council Meeting