BS EDIT: Key takeaways from GST Council's 55th meeting

Relief for small borrowers

The GST Council clarified that no GST is payable on penal charges levied by lenders for non-compliance with loan terms. A welcome relief for small borrowers

Updates on GST rates

* GST on fortified rice kernels reduced

* Gene therapy exempted from tax

* Sale of used vehicles, including electric ones, harmonised at 18 per cent

Key deferrals by the Council

* No decision yet on GST for insurance premiums

* Group of Ministers (GoM) on rate rationalisation seeks more time

* Compensation cess discussion also postponed

Complexity in the tax system

Example:

* Popcorn mixed with salt/spices: 5% GST

* Pre-packed popcorn: 12%

* Caramel popcorn: 18%

The Council needs to address such inconsistencies to simplify the system

Debate over petroleum products and cess

GST Council rejects ATF inclusion, debates but drops natural disaster cess; calls for efficient taxation of petroleum products

The way forward

GoMs to finalise GST rate rationalisation, compensation cess; focus on simpler slabs, revenue-neutral system, and collaborative long-term solutions