India's GST Reforms: Nirmala Sitharaman announces rate tweaks and fee waivers

As India prepares for the upcoming budget in July, Re-elected Finance Minister Nirmala Sitharaman chaired the 53rd Goods and Services Tax (GST) Council meeting on Saturday. Rates on many items, including accommodation or students and railway tickets, witnessed exemptions in the latest rules. Similarly, no GST will be levied on intra-railway services. Milk cans and Solar cookers will observe a uniform 12 per cent rate.

The council has recommended rolling out the biometric-based Aadhaar authentication of applicants on a pan-India basis. This is to check fraud tax claims & counter tax evasion.

Sitharaman expressed the intention to include Petrol and Diesel under the GST umbrella while leaving the final decision to states regarding implementation. Interestingly, 5 commodities, including crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF), were part of the GST law when it was first implemented in 2017. Later, it was decided to tax it at a later date.

The GST council has also recommended a waiver of interest on tax penalties issued in the first 3 years of GST rollout.

Talking about the potential benefits of this GST revamp, Smita Singh, partner at S&A law offices, said, 'Many welcome recommendations have been announced to provide relief to the taxpayer in the 53rd GST Council Meeting held today. It is evident that the new Government is moving ahead with importance to ease of doing business which includes recommendations like waiver of interest and penalty for Notices issued under Section 73 for FY 2017-18 to FY 2019-20. This benefit can be taken by tax payers accepting demand and willing to pay the contended tax.'

She added, 'Another important decision is that no interest is payable where the amount of tax was deposited in electronic cash ledger of the taxpayer while filing GSTR 3B. This will help taxpayers undergoing potential litigation. Further, the GST Council also recommended to reduce the maximum amount of pre-deposit for filing appeal before the appellate authority from 25 crores to 20 crores.'