GST Council Meet: FM Announces Key Changes for Small Businesses and EVs

Date: December 23, 2024
Category: GST Recent News
Read Time: 4 Minutes

The 55th GST Council meeting introduced measures to simplify the GST framework and support key sectors, as announced by Finance Minister Nirmala Sitharaman.

Highlights from the Announcement
Simplified GST Registration for Small Firms
The GST Council approved a concept note to simplify the registration process for smaller businesses, making compliance easier.

GST Exemption for Skilled Training Providers
Training partners focused on skill development will now enjoy GST exemptions. However, a formal notification will confirm the specifics of this exemption.

Compensation Cess Updates
The Group of Ministers (GoM) has yet to provide a fixed timeline for restructuring the compensation cess framework.

Clarifications on SUVs and Electric Vehicles (EVs)

SUV Compensation Cess: The cess will apply prospectively, avoiding any retrospective impact on already sold vehicles.
GST on EVs:
New EVs: A 5% GST rate remains applicable to promote eco-friendly transportation.
Used EVs:
Individual sales: No GST applies.
Company or reseller sales: An 18% GST rate applies to the margin between the purchase and selling prices.
Rationale Behind EV Taxation
The GST Council arrived at the 18% GST rate for used EVs after extensive discussions. Initially, the Centre proposed a 5% rate. However, the final decision resulted from a consensus among stakeholders.

These changes aim to boost EV adoption, simplify compliance for small businesses, and incentivize skill development initiatives across India.