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Press Release

Date: December 21, 2024
Subject: GST Council Approves Targeted Tax Relief, Clarifications, and Compliance Reforms
Description:

The 55th meeting of the GST Council, held at Jaisalmer, Rajasthan under the chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman, approved a set of focused measures aimed at providing tax relief, removing ambiguities, and streamlining GST compliance. Key decisions included a reduction of GST on Fortified Rice Kernel (FRK) to 5 percent and full exemption of GST on gene therapy to support public health objectives. The Council also exempted GST on contributions made by general insurance companies from third-party motor vehicle premiums to the Motor Vehicle Accident Fund and clarified that transactions in vouchers do not constitute a supply of goods or services, thereby removing long-standing interpretational issues. It further clarified that no GST is payable on penal charges levied by banks and NBFCs for loan-related non-compliance. Several rate and classification clarifications were issued for goods such as used vehicles, construction materials, agricultural produce, and food items, along with service-related changes covering hotels, insurance, and sponsorship services. To facilitate trade and reduce litigation, the Council recommended amendments relating to warehoused goods in SEZs, simplified rules on vouchers, and issuance of multiple clarificatory circulars. Additional measures were approved to ease appeals, rationalise pre-deposit requirements, strengthen compliance through track-and-trace mechanisms, and improve GST law and procedure, with many changes proposed to take effect from 1 April 2025.

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