The 55th meeting of the Goods and Services Tax (GST) Council, presided over by Union Finance Minister Nirmala Sitharaman, addressed various tax-related concerns. While significant topics like rate rationalisation and taxation on insurance premiums were not resolved, the Council introduced several focused measures and clarifications to streamline the GST framework.
Relief for Merchant Exporters
A notable decision during the meeting was the reduction of the compensation cess rate on supplies made to merchant exporters to 0.1%. This adjustment aligns the cess rate with the existing GST rate for such transactions, aiming to reduce the financial burden on exporters and support the country’s export-driven industries.
Adjustments in GST Rates on Key Products
To encourage the production and use of fortified rice, the GST Council revised the tax rate on fortified rice kernels, setting it at a more affordable 5%. This move underscores the government’s focus on addressing nutritional challenges and ensuring the availability of enriched food products for the population.
For the construction industry, the Council clarified that ACC blocks containing at least 50% fly ash will attract a GST rate of 12%. This decision aligns with the broader goal of promoting sustainable construction materials while ensuring clarity in taxation policies.
Exemptions for Farmers and Digital Transactions
In a decision beneficial for farmers, the GST Council exempted black pepper and raisins sold directly by farmers from GST. This exemption is intended to support farmers by reducing tax burdens on their produce, helping them secure better earnings.
Additional Clarifications
During the press conference, Sitharaman provided insights into several other areas, including taxation on food and non-food items and the sale of electric vehicles. Although detailed resolutions on these matters were not finalised, the discussions highlighted the Council’s commitment to addressing pressing concerns in a phased manner.
Conclusion
While the 55th GST Council meeting did not yield groundbreaking reforms, the incremental changes introduced aim to simplify compliance, support critical sectors like agriculture and exports, and promote sustainable practices. These measures reflect the government’s ongoing effort to balance tax reforms with sector-specific needs and economic priorities.