GST Council Meeting: FM-led panel approves biometric authentication, 12% rate on milk cans; 10 key highlights

GST Council Meeting: Finance Minister Nirmala Sitharaman chaired the 53rd goods and services tax (GST) Council meeting on Saturday, June 22 at Bharat Mandapam in New Delhi, where government officials deliberated tax rates of various commodities and services based on the recommendations of the group of ministers (GoM).

Among its major announcements, the GST Council today approved rolling out of biometric-based Aadhaar authentication on a pan-India basis, in order to combat fraudulent input tax credit claims made through fake invoices. The FM-led panel also fixed a monetary limit for filing appeals by the tax department before the various appellate authorities.

Also Read: GST council meeting: Will petrol and diesel come under GST? This is what FM Nirmala Sitharaman said

The meeting saw the participation of Union Minister of State for Finance Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha, alongside finance ministers from various states and Union Territories (with legislatures), and senior officials from both union and state governments. 

GST Council Meeting Verdict: 10 big announcements by FM Sitharaman

Here are the top announcements made by finance minister Nirmala Sitharaman at the GST Council meeting based upon the suggestions by the GoM:

1.Pan-India biometric authentication: “There is going to be a rolling out of biometric-based Aadhaar authentication on an all-India basis. This will help us to combat fraudulent input tax credit claims made through fake invoices in the cases,” the minister announced at the briefing after the 53rd GST Council meet.

2.12% uniform rate on milk cans, carton boxes: The GST Council recommended to prescribe a uniform GST rate of 12 per cent on all milk cans meaning steel, iron, aluminum which are irrespective of the use. ‘’They are called milk cans but wherever they are used, that will be the rate applicable so that no disputes arise out of it,'' said FM Sitharaman at the briefing.

The GST Council also recommended the reduction of GST on all kinds of carton boxes and cases made from both corrugated and non-corrugated paper or paperboard from 18 per cent to 12 per cent. This will help horticulturists and benefit apple growers in Himachal Pradesh and Jammu & Kashmir. 

A uniform GST rate of 12 per cent was recommended for solar cookers, whether single or dual energy source. All types of sprinklers, including fire and water sprinklers, will also attract a uniform GST rate of 12 per cent.

3.GST exempted on platform tickets: GST Council proposed the exemption for specific services offered by Indian Railways to the general public, and for intra-railway transactions. The sale of platform tickets and services such as retiring rooms, waiting rooms, cloakroom facilities, and battery-operated car services are now exempt from GST.

Also Read: GST Council Meet: Nirmala Sitharaman announces pan-India roll out of biometric-based Aadhaar authentication - Explained

4.Monetary limit fixed for filing of appeals: The GST Council has fixed a monetary limit for filing appeals by the tax department before the appellate authorities to reduce government litigations. It has recommended a monetary limit of ₹20 lakh for GST Appellate Tribunal, ₹1 crore for the High Court and ₹2 crore for the Supreme Court for filing of appeals by departments before these legal forums.

The GST Council has also recommended that the maximum amount for pre-deposit for filing appeal before the appellate authority be reduced from ₹25 crore CGST and ₹25 crore SGST to ₹20 crore CGST and ₹20 crore SGST.

5.GST exempted on hostel accommodations: The GST Council has exempted services by way of hostel accommodation outside educational institutions to the tune ₹20,000 per person per month. It is meant for students or working class and exemption can be availed only if the stay is up to 90 days, according to finance minister Nirmala Sitharaman. This exemption will benefit hostels and similar accommodations run by various social and community organizations.

6.Waiver of interest penalties on demand notices: The GST Council today recommended waiving interest penalties on demand notices issued under Section 73 of the GST Act for fiscal years 2017-18, 2018-19, and 2019-20. This section pertains to cases not involving fraud, suppression, or misstatement. Taxpayers who pay the full tax amount demanded in the notice by March 31, 2025, will benefit from this waiver.

7.ITR deadline extended for small taxpayers: In a move to assist small taxpayers, the GST Council extended the deadline for furnishing returns from April 30 to June 30 for the fiscal year 2024-25 and subsequent years. 

“In order to help small taxpayers, the Council recommended extending the time limit to furnish the detail and the returns in the form GSTR 4 from April 30, the Council has recommended that it be extended to June 30. This will apply for returns for the Financial Year 2024- 25 onwards,” said FM Sitharaman.

Also Read: GST Council Meeting: Tax rates changed for goods & services; Here’s what gets cheaper & costlier

8.Extension of ITC on invoice: The GST Council approved an extension for availing input tax credit (ITC) on any invoice or debit note. For returns filed up to November 30, 2021, the deadline for ITC claims for the fiscal years 2017-18, 2018-19, 2019-20, and 2020-21 is now deemed to be November 30, 2021.

“The time limit to avail ITC in respect of any invoice or debit note under section 16(4) of the CGST Act filed up to the 30-11-2021 for the financial years 17-18, 18-19, 19-20 and 20-21 may be deemed to be 2011 to 2021. So for the same requisite amendment retrospectively with effect from 1 July 2017, the council has made a recommendation," said FM Sitharaman.

9.Exemption of ENA: The GST Council, in its 52nd meeting, had recommended to amend GST laws to explicitly exclude rectified spirit/Extra Neutral Alcohol (ENA) from the scope of GST when supplied for manufacturing alcoholic liquors for human consumption. The GST Council has now recommended amendment in sub-section (1) of Section 9 of the CGST Act, 2017 for not levying GST on ENA used for manufacture of alcoholic liquor for human consumption.

10.Decision of petrol, diesel tax under state governments: FM Sitharaman reiterated the central government's intent to bring petrol and diesel under the GST framework. She highlighted that the groundwork for this inclusion was laid years ago and emphasized that the decision now lies with state governments.

Sitharaman recalled the foundational discussions led by former Finance Minister Arun Jaitley, who articulated the vision of including petrol and diesel under GST. "GST was implemented, I distinctly remember senior minister Arun Jaitley talking about that the progress so exists already in that meaning, GST, petrol and diesel can be handled for which the law has been already embedded", Sitharaman stated.

The central government has long maintained that incorporating petrol and diesel into GST would streamline tax rates and potentially reduce prices for consumers. However, Sitharaman clarified that this move requires consensus among the states, as they play a crucial role in determining the rate of taxation.