GST Council Meeting: From no Bank Penalty charges to Status Quo on Food Delivery Platforms, Check Major Decisions Here

The 55th GST Council Meeting, chaired by Finance Minister Nirmala Sitharaman on December 21, introduced several significant reforms to streamline taxation and reduce burdens on key sectors. Among the highlights were GST exemptions for payment aggregators handling transactions below ₹2,000 and a reduction in compensation cess to 0.1% for merchant exporters. Additionally, tax relief for components used in the Long Range Surface to Air Missile (LR-SAM) system was extended.

Banking Sector Relief

In a major relief for borrowers, the Finance Minister announced that banks and financial institutions will no longer collect GST on penalty charges imposed for delayed payments. This decision aims to address compliance issues within the financial sector.

Agriculture and Exporter Support

The council approved a GST exemption for black pepper and raisins supplied by agriculturists, promoting rural economic growth. Merchant exporters also benefited, with the reduction of compensation cess to 0.1%, aligning with the GST rate.

Key rate changes include a reduction of GST on fortified rice kernels to 5% and an imposition of 12% GST on ACC blocks with over 50% fly ash. Gene therapy treatments were exempted from GST, while definitions for pre-packaged and labeled items were revised for better clarity.

Proposals for reducing GST on health insurance premiums, particularly for elderly citizens, remain under deliberation. Bihar Deputy Chief Minister Samrat Chaudhary led the panel recommending tax exemptions or reductions for term life and health insurance coverage up to ₹5 lakh. However, the final decision has been postponed.

The council deferred a decision on revising GST for food delivery platforms like Swiggy and Zomato. The current rate of 18% with input tax credit remains unchanged. Meanwhile, a proposal to include aviation turbine fuel under GST was rejected by state governments, citing its classification under the crude petroleum and diesel category.

Ready-to-eat popcorn now incurs varied GST rates: 5% for unpackaged, 12% for pre-packaged and labeled, and 18% for sugar-coated varieties such as caramel popcorn.

These reforms reflect the government’s commitment to addressing stakeholder concerns while promoting economic growth.