The 54th GST Council meeting was held in New Delhi on September 9, 2024, under the chairmanship of Union Finance Minister Nirmala Sitharaman. The meeting was also attended by Union Minister of State for Finance Pankaj Chaudhary, the Chief Ministers of Goa and Meghalaya, the Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, as well as Finance Ministers of States and Union Territories with legislatures, and senior officials from the Ministry of Finance and State/Union Territories.
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Highlights from 54th GST Council Meeting
As per the Press Information Bureau, here are the following key highlights from the 54th GST Council meeting on 09th September 2024.
Exemption for R&D Educational Institutions
GST Council recommended exempting the supply of research and development services by government entities or research associations, universities, colleges, or other institutions notified under section 35 of the Income Tax Act when using government or private grants.
Reduced GST Rates on Cancer Drugs
The Council recommended reducing GST rates on certain cancer drugs, including Trastuzumab Deruxtecan, Osimertinib, and Durvalumab, from 12% to 5%.
B2C E-Invoicing Pilot
GST Council has recommended implementation of e-invoicing for B2C transactions in a phased manner to prevent cases of false invoicing. This will allow customers to verify their invoices before reporting them while filing GST Returns. Until now, e-invoicing was applicable to B2B transactions for a registered person with a turnover of over Rs.5 crore
Enhancements to the New Invoice Management System
Post the introduction of the Invoice Management System, the GST Council proposed other enhancements to the current GST return filing mechanism, such as a Reverse Charge Mechanism (RCM) ledger and an Input Tax Credit Reclaim ledger.
Status Report on Rate Rationalisation and Real Estate
The status reports were duly submitted by the Group of Ministers (GoM) formed on rate rationalisation and real estate, respectively, on the basis of which further discussions regarding the above two subjects will be held in upcoming council meetings.
No Changes to GST On Online Gaming
No changes were announced to GST on Online Gaming. Therefore, as decided in the 50th GST Council meeting held in October 2023, 28% of the GST stands applicable to casinos, games, and race courses.
The status was due to be reviewed after six months of the implementation. The current revenue from Online Gaming had increased by 412% in 6 months to Rs. 6,909 crores from Rs.1,349 crores before the notification was issued, whereas the revenue in case of casinos was increased by 30%, i.e., from Rs.164 crores to Rs. 214 crores.
GoM on Life and Health Insurance
The GST Council recommended the formation of a Group of Ministers (GoM) to study GST related to life and health insurance, which is an extension of the GoM on Rate Rationalisation. The newly formed GoM is required to submit the report by the end of October 2024. Therefore, the GST Council maintained the status quo by keeping the GST rate at 18% on life and health insurance and deferring it to the next meeting. The next GST Council Meeting will happen in November 2024.
Committee of Secretaries for IGST
A Committee of Secretaries under the chairmanship of the additional secretary revenue will be formed to explain and decide on the future of IGST and how to proceed with the same. Given a negative balance in IGST, retrieval process of the excess IGST passed on to some states will be studied. This report has to be submitted by the end of October 2024.
GoM on Compensation Cess
Finance Minister Nirmala Sitharaman stated that the total cess collected amounted to ₹8,66,706 crore. Additionally, she announced the formation of a Group of Ministers (GoM) to investigate and recommend a path forward for the compensation cess, which is scheduled to expire in March 2026. The GoM will study the feasibility of extending the cess or explore alternative funding mechanisms to support states impacted by the GST transition.
GST Rate Changes/Clarifications from 54th GST Council Meeting
| Goods/Service | HSN/SAC Code | Current Rate | Recommended Rate | Remarks |
| Cancer drugs like Trastuzumab Deruxtecan, Osimertinib and Durvalumab | 9804 | 12% | 5% | To make the cancer treatment more affordable |
| Namkeens and Extruded/Expanded Savoury food products | 19059030 | 18% | 12% | The change will be applied prospectively |
| Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways | 8415 | 28% | ||
| Car and Motor cycle seats | 9401 | 18% | 28% | The change will be applied prospectively |
| Transport of passengers by helicopters | 9964 | 18% | 5% |
54th GST Council Meeting Press Release Download
Download the 54th GST Council meeting press release issued by press information bureau after the conclusion of the meeting and press conference on 09th September 2024.
GST Rate Changes and Clarifications on Goods
1. GST on Namkeens and Extruded/Expanded Savoury Food Products
In the 54th GST Council meeting, the GST rate on namkeens, extruded, and expanded savory food items like bhujia was prospectively reduced from 18% to 12% except un-fried/un-cooked snack pellets).
2. GST Rate on Cancer Drugs
To make cancer treatment more affordable, the GST Council previously exempted the life-saving drug Dinutuximab (Qarziba), valued at Rs. 36 lakh, from GST. In their 54th meeting, the Council further reduced the GST rate on cancer drugs likeTrastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%.
3. RCM on Metal Scrap
A Reverse Charge Mechanism (RCM) will be introduced for the supply of metal scrap from unregistered suppliers to registered persons. The supplier must register when they exceed the threshold limit. The recipient, liable under RCM, will pay the tax even if the supplier is below the threshold. Additionally, a 2% Tax Deducted at Source (TDS) will apply to B2B supplies of metal scrap by registered persons.
Related Read: GST Rates on Steel and Iron Metal Scraps
4. GST on RMPU Air Conditioning Machines for Railways
Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways will be classified under Harmonized System (HS) code 8415, subject to a 28% GST rate.
Related Read: GST Rate on Air Conditioners (AC)
5. GST Rate on Car and Motorcycle Seats
The GST rate on car seats under HS code 9401 will be increased from 18% to 28%. This uniform rate of 28% will apply prospectively to car seats of motor cars, aligning with the 28% GST rate for motorcycle seats.
GST Rate Changes and Clarifications on Services
1. GST on Life and Health Insurance Premiums
At present, the GST rate on life and health insurance premiums is 18%. During the 54th GST Council meeting, it was expected that the 18% GST rate would either be exempted or reduced to 5%.
The 54th GST Council recommended the formation of a Group of Ministers (GoM) to comprehensively address GST-related issues concerning life and health insurance. The GoM members include Bihar, Uttar Pradesh, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, Meghalaya, Goa, Telangana, Tamil Nadu, Punjab, and Gujarat. The GoM is expected to submit its report by the end of October 2024.
2. GST on Transport of Passengers by Helicopters
The council has implemented a 5% GST rate on the transportation of passengers by helicopters on a seat-sharing basis and to retroactively regularize GST for past periods. Additionally, it’s clarified that chartering a helicopter will continue to be subject to an 18% GST rate.
3. GST on Flying Training Courses
In the 54th GST Council meeting, it was decided to issue a circular clarifying that approved flying training courses conducted by DGCA-approved Flying Training Organizations (FTOs) are exempt from GST.
4. GST on Supply of Research and Development Services
In August 2024, seven Indian educational institutions faced GST notices from the DGGI demanding ₹220 crore in unpaid taxes. Meanwhile, the 54th GST Council meeting exempted university R&D grants from GST.
5. GST on Payment Aggregators
Currently, payment aggregators enjoy a GST exemption for transactions under ₹2,000. This exemption was implemented in 2017 to encourage digital payments for smaller merchant transactions. The 54th GST Council meeting considered imposing an 18% GST on payment aggregators for income from transactions below ₹2,000. However, the decision was deferred and referred to the Fitment Committee for further review.
6. GST on Preferential Location Charges (PLC)
Preferential Location Charges (PLC) paid for construction services of residential, commercial, or industrial complexes before the issuance of a completion certificate are considered part of a composite supply. The main service in this case is the construction service, and PLC is naturally bundled with it. Therefore, PLC is eligible for the same GST treatment as the construction service.
7. GST on Affiliation services
Affiliation services provided by educational boards like CBSE are subject to GST. However, affiliation services offered by State/Central educational boards, educational councils, or similar entities to government schools will be exempt from GST prospectively. Past tax liabilities for the period between 01.07.2017 and 17.06.2021 will be regularized on an ‘as is where is’ basis.
A circular will be issued to clarify that affiliation services provided by universities to their constituent colleges are not covered under the exemptions granted to educational institutions in Notification No. 12/2017-CT(R) dated 28.06.2017. Therefore, these affiliation services are subject to an 18% GST rate.
8. GST on Import of service by branch Office
The GST Council recommended exempting the import of services by a foreign airline company’s establishment in India from a related person or any of its establishments outside India, when such imports are made without consideration. Additionally, the Council recommended regularizing past tax liabilities on an ‘as is where is’ basis.
9. RCM on Renting of commercial property
To prevent revenue leakage, the GST Council recommended bringing the renting of commercial property by unregistered persons to registered persons under the Reverse Charge Mechanism (RCM)
10. Ancillary/intermediate services are provided by GTA
To clarify that when ancillary/intermediate services like loading, unloading, packing, unpacking, transshipment, or temporary warehousing are provided by a Goods Transport Agency (GTA) during the transportation of goods by road and the GTA also issues a consignment note, these services will be considered part of a composite supply. However, if these services are not provided in the context of transportation and are invoiced separately, they will not be treated as part of the composite supply of transportation.
Related Read: Goods Transport Agency Under GST
54th GST Council Meeting in 2024: New Measures
B2C E-invoicing
- The GST Council recommended a pilot rollout of B2C e-invoicing, building on the successful implementation of B2B e-invoicing.
- The Council highlighted potential benefits for retail, such as increased efficiency, environmental friendliness, and cost savings.
- Retail customers would have the opportunity to verify invoice reporting in GST returns.
- The pilot will be voluntary and implemented in selected sectors and states.
Invoice Management System and New Ledgers
- The Council noted enhancements to the GST return architecture, including an RCM ledger, an Input Tax Credit Reclaim ledger, and an Invoice Management System (IMS).
- Taxpayers will have until October 31, 2024, to declare their opening balances for these ledgers.
- IMS will enable taxpayers to accept, reject, or hold invoices for input tax credit purposes.
- This optional feature aims to reduce input tax credit errors and improve reconciliation, potentially leading to fewer notices due to ITC mismatches in returns.
