Industry leaders welcome GST Council's decision on rate cuts
The industry leaders welcome the GST council's decision on rate cuts and policy adjustments in various sectors.
ANI
Sep 10, 2024 09:20 IST
New Delhi [India], September 10 (ANI): The industry leaders welcomed the GST council's decision on rate cuts and policy adjustments in various sectors.
In a significant move to provide relief across various sectors, the GST Council, during its 54th meeting held on Monday, announced several key decisions that received a positive response from industry leaders.
One of the most notable decisions was the exemption of GST on the import of services by foreign airlines operating in India through branch offices. This relief comes as a major win for the airline industry, especially after the Directorate General of GST Intelligence (DGGI) had raised demands amounting to nearly Rs 39,000 crore in taxes from these airlines.
"In a major relief to the airline industry, GST has been exempted on import of services by foreign airline companies operating in India through branch offices, from their head offices or other establishments outside the country. Further, it appears that past period issues will be regularised as well. This will put to rest the recent show cause notices where a GST demand of approx. Rs 39,000 crores was raised by the DGGI on foreign airlines operating through branch offices in India" said Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co.
The food industry also saw a significant reduction in the GST rate on namkeen products, with the rate being slashed from 18 per cent to 12 per cent. As per the industry leaders, the amendment clarifies the tax treatment prospectively, ensuring no further ambiguity on applicable rates.
"Extrusion is a technique used to create ready to eat puff snacks. As this process is mentioned in the HSN entry 1905 liable to tax @ 18 per cent, the authorities were alleging that products are liable at the higher rate. However, the industry was classifying the said products under entry 2016 which covers Namkeen, etc. liable to tax @ 12%. With this amendment, the issue of classification on these products has been put to rest prospectively," said Harpreet Singh, Partner, Deloitte India.
The Council also introduced reductions on critical cancer drugs, lowering the GST from 12 per cent to 5 per cent, and introduced GST exemptions on services linked to helicopter-sharing for religious pilgrimages.
"The council has taken various rate rationalisation measures like reduction of GST on cancer drugs from 12 per cent to 5 per cent, namkeens, sharing helicopters for pilgrimage which will lessen the burden on consumers. " said Shivashish Karnani, Head of GST at DPNC Global.
He also pointed out the Council's decision to explore lower GST rates for life and health insurance services through a newly formed Group of Ministers (GoM), with a report expected by October 2024.
With a growing emphasis on research and development, the Council also granted GST exemptions to government universities and research centres on grants received for research activities, a move seen as critical to boosting India's position as a research hub. Meanwhile, discussions around online gaming taxation remain ongoing, with no decisions made in the latest meeting. (ANI)
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