(Vigyan Bhawan, New Delhi)

Summary of Points Finalized in the Meeting

1. Approval of Amendments to Draft GST Rules and Forms (Accounts and Records)

The Council approved the GST Rules on Accounts and Records along with related forms, including several key amendments:

Taxpayers are now allowed to maintain combined records for all economic activities instead of separate records for manufacturing, trading, and services.

Record-keeping requirements were limited to transactions with registered persons only.

Correction of clerical errors in records does not require change logs.

Manual accounts must be maintained at each business location; electronic records must be accessible at every relevant location.

Retained the audit trail provision in a modified form—registered persons must provide access to digital records and passwords when demanded.

Transporters must maintain records of goods transported, delivered, or stored in transit, including consignor and consignee GSTIN details.
16th GST Council Meeting, pages 3–4, 4

2. Composition Scheme for Small Taxpayers (Rate Adjustments)

The Council extensively debated the turnover limit and rates under the Composition Scheme for small and medium enterprises (SMEs).

After deliberations, it was decided to increase the annual turnover threshold from ₹50 lakh to ₹75 lakh, keeping the rates unchanged.

A negative list of manufacturers (ineligible for the Composition Scheme) would be prepared to minimize revenue loss.

Several members highlighted the importance of protecting SMEs while maintaining revenue balance.
16th GST Council Meeting, pages 5–11, 11 

3. Rate Adjustments Based on Trade and Industry Representations

The Fitment Committee reviewed representations and recommended rate changes for 66 items.

Key decisions included:

Food Items: Tax on pickles, chutney, murabba, ketchup, and similar processed foods reduced from 18% to 12% to support food processing.

Ayurvedic Medicines: Approved at 12%, balancing current tax incidence (~13%).

Insulin: Tax reduced from 12% to 5%.

Bio Gas: Tax lowered to 5% instead of 12%.

Children’s Picture, Drawing, and Coloring Books: Fully exempted from tax instead of 12%.

Masala (spice mixtures): Clarified to be taxed at 5% under Chapter 9.

Marble and Granite Slabs: Retained at 28% despite industry appeals.

Laundry Detergents and Dishwashing Products: Maintained at 28%, given high revenue contribution.
16th GST Council Meeting, pages 12–17, 13, 14, 15–17

4. General Direction on Future Rate Reviews

The Council agreed that further rate rationalizations could be considered after observing initial revenue trends post-GST implementation.

The Fitment Committee would continue reviewing representations from trade and industry for justified adjustments.
16th GST Council Meeting, page 18
Key Outcome:
The 16th GST Council Meeting finalized important changes to GST Rules and clarified tax rates for multiple commodities. The meeting focused on balancing revenue needs with the interests of small businesses and consumers ahead of GST rollout on 1 July 2017.