52nd GST Council Meeting

The 52nd GST Council met under the Chairpersonship of the Union Minister for Finance.

Key Highlights:

• The council proposed keeping Extra Neutral Alcohol (ENA), which is used to make alcoholic liquor for human consumption, outside of the GST jurisdiction.
• It made clear that corporate guarantees given by a parent firm to its subsidiaries will be subject to an 18% GST rate.
• When sold loose, millet flour in powder form with at least 70% millet by weight is exempt from GST; however, if it is sold packed and labeled, a 5% fee will apply.
• The question of how the cess will remain under the GST once it expires in March 2026 was also brought up by the states. Right now, the cess is being used to repay the borrowed sum that was intended to make up for the states' losses during the first five years of the GST, which concluded in June 2022.

About GST Council:

• After the Constitutional (122nd Amendment) Bill was approved by both Houses of Parliament in 2016, the Goods and Services Tax regime went into effect.
• A joint forum of the federal government and the states is the GST Council. In accordance with Article 279A (1) of the modified Constitution, the President established it.
• The council's role is to advise the Union and the states on significant GST-related matters, such as model GST laws and the types of goods and services that may be subject to or excluded from the tax. It also determines the different GST rate slabs.
• The Union Minister of State (Finance) from the Center and the Union Finance Minister (chairperson) are among the Council's members. Any other minister or the minister in charge of finances or taxes may be nominated as a member by any state.
• The Union Government holds one-third of the voting authority in the council, while the States have the remaining two-thirds. The 3/4th majority makes the decisions.

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