In its recent meeting, the GST Council approved several rate revisions aimed at simplifying the tax structure and addressing sector-specific concerns. Among the key decisions was the reduction of GST on Fortified Rice Kernels (FRK) from 18% to 5%, supporting government nutrition schemes. The Council also announced exemptions for gene therapy treatments, recognizing their critical role in healthcare. These revisions are part of a broader effort to align tax policies with national priorities in health and food security.

Another significant revision includes the increase in GST on old and used vehicles, including electric vehicles, from 12% to 18%. However, this higher rate is applicable only on the margin of sale when depreciation has been claimed. The Council also clarified that caramelized popcorn now falls under the category of sugar confectionery, attracting an 18% GST rate due to its sugar content. These changes aim to bring uniformity in classification and taxation, preventing litigation and enhancing clarity for businesses.In addition to rate changes, the Council issued important compliance clarifications. It was confirmed that penal interest charges on loans by banks and NBFCs are not taxable under GST, as they are not considered payments for any supply. Furthermore, vouchers distributed in a principal-to-principal manner will not attract GST, while agents charging distribution fees will be taxed. These measures underscore the Council’s intent to promote fairness, consistency, and ease of doing business within the GST framework.