Railway services, hostel stay exempted from GST

Council to tackle rate rationalisation in next meeting

Updated - June 22, 2024 10:19 pm IST

Published - June 22, 2024 07:41 pm IST - New Delhi

Union Finance Minister Nirmala Sitharaman chairs the 53rd GST Council meeting in New Delhi on June 22, 2024.

Union Finance Minister Nirmala Sitharaman chairs the 53rd GST Council meeting in New Delhi on June 22, 2024. | Photo Credit: PTI

Meeting after almost nine months, the Goods and Services Tax (GST) Council on Saturday approved measures to ease compliance for small businesses, exempted hostel accommodation worth up to ₹20,000 a month as well as Railway services, and resolved to reconvene in August to initiate parleys on rejigging the multiple rates levied under the seven-year old indirect tax.

With 11 new members from States such as Bihar, Andhra Pradesh, Haryana, Rajasthan, and Odisha, the Council could only take up a part of its heavy agenda of clarifications and trade facilitation measures, but did grant some relief to taxpayers, including a waiver of interest and penalties on some past tax demands, along with steps to reduce litigation.

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Finance Minister Nirmala Sitharaman, the Council’s chairperson, said that members had agreed to roll out biometric-based Aadhaar authentication for all GST registrations across the country in a phased manner. She stressed that this will not only quicken the registration process but also curb the fraudulent use of input tax credits through fake invoices.

Future agenda

Apart from the GST exemption for hostel accommodation outside the campuses of educational institutions, which Ms. Sitharaman said would benefit students across India, especially those from rural areas, the Council also clarified the GST rates on several items. For instance, it was clarified that a number of products, including milk cans, sprinklers, carton boxes, and solar cookers, will now attract 12% GST, irrespective of use, material, or energy source.

At its next meeting, which Ms. Sitharaman said is likely after the Budget session of Parliament, the Council will take up pending procedural issues on its agenda as well as broader challenges. These include the rationalisation of GST rates, which a ministerial group is tasked with, and the future of the GST Compensation Cess after its expiry in March 2026.

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