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The Indian government has changed the Goods and Services Tax (GST) regime. Goods and Services Tax (GST) is a comprehensive indirect tax system in India that was implemented in July 2017 to replace other taxes such as VAT, Excise Duty, and Service Tax. GST is charged on the supply of goods and services, with the tax rate varying according to the type of products and services supplied. GST is a destination-based tax, meaning the tax income is paid to the state where the products or services are consumed. The GST council, which consists of representatives from the central and state governments, makes decisions about the tax rate and any modifications to the GST law.
1. Tax Rate Adjustments for Used Automobiles: The GST Council has raised the GST rate on selling all old and used vehicles, including electric vehicles (EVs), from 12% to 18%.
2. Consideration of GST Reduction on Online Food Delivery Fees: The GST Council is evaluating a proposal to reduce the GST on food delivery charges from e-commerce platforms, such as Zomato and Swiggy, from 18% to 5%. This adjustment is intended to make food delivery services more affordable for consumers.
3. Exclusion of Aviation Fuel from GST Regime: The GST Council has rejected the proposal to include aviation turbine fuel (ATF) under the GST regime. Currently, state governments determine the taxation of ATF, leading to varying tax rates across states.
4 .GST Collections Increase: In November 2024, India's GST collections rose by 8.5% year-on-year, totaling ₹1.82 trillion. This increase reflects economic growth and improved compliance.
5. Tax Classification on Popcorn: The GST Council has introduced distinct GST rates for popcorn: 5% for non-branded salted popcorn, 12% for pre-packaged and branded popcorn, and 18% for caramel popcorn due to added sugar. This decision has sparked public and political debate over the tax system's complexity.
GST Updates Released in December 2024
The 55th GST Council met on December 21, 2024, in Jaisalmer, Rajasthan. The Union Finance and Corporate Affairs Minister presided over the meeting, which was attended by Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers of Haryana, Jammu and Kashmir, Meghalaya, and Odisha, Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, as well as Finance Ministers of States and UTs (with legislature) and senior officers of the Ministry of Finance and States/UTs.
The government stressed that taxpayers could only generate e-way bills for documents dated no earlier than 180 days. An e-way bill's validity can also be extended for up to 360 days after it was generated. MFA/2FA will be necessary on NIC portals to create e-invoices and e-way bills for taxpayers with annual aggregate turnover (AATO) of more than ₹20 Crores, spreading to all users staggered from April 1, 2025. Logging in requires a username, password, and an OTP (given to a registered mobile phone or app).
All changes outlined above will take effect on January 1, 2025.
GSTN has issued an advisory on Biometric-Based Aadhaar Authentication and Document Verification for GST Registration in several states. Rule 8 now covers biometric-based Aadhaar authentication based on data analysis, risk parameters, and document verification. After applying Form GST REG-01, the applicant will receive an email requesting either OTP-based authentication or a GSK appointment for biometric verification, along with the requisite documents such as an Aadhaar and PAN card. This seeks to streamline and improve the registration procedure.
The 55th GST Council meeting will take place on December 21, 2024, in Jaisalmer, Rajasthan. The council is anticipated to make recommendations based on the Status Report given by the Group of Ministers. The gathering is a must-see, with topics ranging from merging tax slabs to streamline the current GST framework to proposing a new 35% tax rate.
Furthermore, GST rates for essential products such as packaged drinking water and exercise notebooks are expected to fall, but luxury goods such as high-end shoes and watches would rise.
Additionally, GST rates for insurance premiums, textiles, educational products, and cosmetics may alter.
An advisory was issued regarding entering receipt numbers for leased wagons in the E-Way Bill System.
Effective January 1, 2025, E-Way Bill and E-Invoice systems will essential Multi-Factor Authentication (MFA).
The deadline for filing GSTR-3B for October 2024 has been extended for taxpayers in Murshidabad, West Bengal, per Central Tax Notification No. 30/2024.
An advisory was provided to correct inconsistencies between Table 8A and Table 8C numbers in the GSTR-9 annual return for FY 2023-24.
Advisory on the essential sequential filing of GSTR-7 under Notification No. 17/2024.
Advice on entering RR No./eT-RRs and integrating E-Way Bills into the FOIS system.
The GST collection data for November 2024 showed an income of ₹1.82 lakh crore.
Advisory issued on GST E-Invoice terminology and guidance.
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Question & Answer
1. What was the purpose of the Goods and Services Tax (GST) implemented in India in July 2017?
A) To introduce a new direct tax system
B) To replace VAT, Excise Duty, and Service Tax
C) To increase income tax rates
D) To regulate international trade
Answer: B) To replace VAT, Excise Duty, and Service Tax
2. What is the GST rate on the sale of old and used vehicles, including electric vehicles (EVs), after the recent update?
A) 5%
B) 12%
C) 18%
D) 28%
Answer: C) 18%
3. Which proposal regarding aviation turbine fuel (ATF) was recently rejected by the GST Council?
A) Reduction of GST on ATF
B) Inclusion of ATF under the GST regime
C) Increasing tax rates on ATF
D) Exemption of ATF from GST
Answer: B) Inclusion of ATF under the GST regime
4. What is the proposed reduction in GST for food delivery charges from platforms like Zomato and Swiggy?
A) 18% to 12%
B) 12% to 5%
C) 18% to 5%
D) 28% to 18%
Answer: C) 18% to 5%
5. What is the GST rate on caramel popcorn due to the addition of sugar?
A) 5%
B) 12%
C) 18%
D) 28%
Answer: C) 18%
6. What change has been made regarding the validity of e-way bills?
A) Valid for 90 days
B) Valid for 180 days, extendable to 360 days
C) Valid for 120 days, non-extendable
D) Valid for 60 days
Answer: B) Valid for 180 days, extendable to 360 days
7. What authentication method will become mandatory for e-invoices and e-way bills for businesses with AATO over ₹20 Crores starting April 2025?
A) Single-factor authentication
B) OTP-based authentication
C) Multi-Factor Authentication (MFA)
D) Biometric authentication only
Answer: C) Multi-Factor Authentication (MFA)
8. Which states were advised to use biometric Aadhaar identification for GST registration document verification?
A) Maharashtra and Gujarat
B) Haryana, Manipur, Meghalaya, and Tripura
C) Karnataka and Kerala
D) Punjab and Rajasthan
Answer: B) Haryana, Manipur, Meghalaya, and Tripura
9. What was the GST collection in November 2024?
A) ₹1.5 trillion
B) ₹1.7 trillion
C) ₹1.82 trillion
D) ₹2 trillion
Answer: C) ₹1.82 trillion
10. What advisory was issued regarding the correction of inconsistencies in the GSTR-9 annual return for FY 2023-24?
A) To file returns early
B) To correct inconsistencies between Table 8A and Table 8C
C) To use biometric data for validation
D) To seek manual approval from tax authorities
Answer: B) To correct inconsistencies between Table 8A and Table 8C
11. Which notification enlarged the deadline for filing GSTR-3B for October 2024 for taxpayers in Murshidabad, West Bengal?
A) Notification No. 10/2024
B) Notification No. 30/2024
C) Notification No. 50/2024
D) Notification No. 17/2024
Answer: B) Notification No. 30/2024
12. What new feature has GSTN introduced for Aadhaar authentication during GST registration?
A) OTP-based authentication only
B) Biometric-based Aadhaar authentication and document verification
C) Manual document verification at GST offices
D) No new features were introduced
Answer: B) Biometric-based Aadhaar authentication and document verification
