The 55th Goods and Services Tax (GST) Council meeting has introduced a revision in taxation for electronic vehicles (EV) sales, declaring that transactions involving pre-owned vehicles between individuals will now be exempt from GST. However, a tax rate of 18% will apply to the sales between companies, while new vehicles will be taxed at 5%.
The meeting, held in Rajasthan on December 20, Saturday, was chaired by Union Finance Minister Nirmala Sitharaman. Participants included Finance Ministers, Chief Ministers, and Deputy Chief Ministers from various states.
Although important revisions concerning health insurance and food delivery platforms such as Swiggy and Zomato were on the agenda, the council decided to postpone these proposals. Nirmala clarified in a press briefing that more time is needed for health insurance decisions, as inputs from insurance regulators are still awaited.
Another significant item on the agenda, regarding the inclusion of Aviation Turbine Fuel (ATF) under the GST ambit, was rejected by the council. Currently, ATF is subject to Excise Duty and Value Added Tax (VAT), which vary from state to state. The industry had made multiple requests in the past to bring it under the GST, as the higher costs would ultimately affect ticket prices.
Here are the other five key takeaways:
The GST rate for fortified rice kernels has been reduced to 5% from 18%, regardless of end use. This is intended to ensure the food item is passed on to the public distribution system (PDS).
There will be an extension of the concessional 5% GST on food preparations intended for free distribution to the Economically Weaker Sections (EWS) under a government scheme.
Unpacked popcorn with salt and spices will now attract 5% GST, while pre-packaged popcorn will be taxed at 12%, and caramel-coated at 18%.
No GST will be levied on the penal charges imposed and collected by banks and non-banking financial companies ( NBFC) from borrowers for non-compliance with loan terms.
Payment aggregators processing less than Rs 2,000 in transactions are eligible for exemption. However, this does not include payment gateways and fintech services.