IMF has retained India’s GDP forecast for FYs 2026 and 2027 at 8.5%. Other forecasts for FY 2026 are 6.7% by S & P and World Bank, 6.6% by India Ratings and 7% by RBI & Barclays. According to IMF, growth in India had slowed down more than expected, led by sharper than expected declaration in the in the industrial activity. India continues to be the fastest growing economy with China in the range of 4.5 – 4.9%, Indonesia 5% and US 2 to 2.8%. The World average is projected @ 2.7% for these years.
The Budget session of Parliament shall commence on 31st January, 2025 and Budget shall be presented by Finance Minister on 1st February, 2025. Economic Survey is also expected to be tabled on 31st January, 2025. The Budget session will be in two parts - 31st January to 13th February and then from second week of March, 2025.
According to media reports, the setting up of GST Appellate Tribunals may take about six months more to get started as the process of appointment of members and finalization of physical infrastructure is pending with many states. Appointment of support staff is also pending. As already decided, GSTAT benches will function on fully electronic and paperless basis.
CBIC has amended its arrest guidelines whereby, GST officers shall have to explain to the defaulting taxpayer about the grounds of arrest before arresting them and also take an acknowledgment from them about such information of grounds. Thus, grounds of arrest must be explained to the person being arrested and also attached the same as an Annexure to the arrest memo.
CBIC has also issued various Notifications on 16.01.2025 to implement several recommendation of GST Council taken in 55th GST Council meeting on 21.12.2024.
New GST Notifications issued by CBIC on 16.01.2024
Based on the recommendations of GST Council in its 55th meeting dated 21.12.2024, CBIC has issued following Notifications to implement the decisions taken therein.
*Similar Notifications have been issued under UTGST and IGST respectively.
Amendments relating to GST on Goods
- The CBIC has amended Notification No. 01/2017-CT(Rate) dated 28.06.2017 to reduce GST rate of Fortified Rice Kernel to 5% from 18% and amend definition of “pre-packaged and labelled”.
- Following amendments have been made:
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- New entry No. 98B pertaining to Fortified Rice Kernel (FRK) in Schedule I – 2.5%
- Insertion of the words “Fortified Rice Kernel (FRK)” after the words “commonly known as Murki” in Schedule III – 9% against S. No. 15 in column (3)
- Effective rate of GST on fortified rice kernel shall now be 5%
- In the Explanation, for clause (ii) and the proviso appended to it after the Schedule VII, the definition of the expression ‘pre-packaged and labelled” as “(ii) has been substituted and the expression ‘pre-packaged and labelled’ means all commodities that are intended for retail sale and containing not more than 25 kg or 25 litre, which are ‘pre-packed’ as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 and the rules made thereunder.”
- This notification shall come into force with immediate effect, i.e., 16.01.2025.
(Source: Notification No. 01/2025-CT (Rate) dated 16.01.2025)
Gene therapy exempted from levy of GST
- The CBIC has amended Notification No. 02/2017-CT (Rate) dated 28.06.2017 to insert a new entry No. 105A for “Gene Therapy”.
- Thus, Gene Therapy shall be exempt from levy of GST.
- In the Explanation, for clause (ii) and the proviso appended to it, the definition of the expression ‘pre-packaged and labelled” as “(ii) has been substituted and the expression ‘pre-packaged and labelled’ means all commodities that are intended for retail sale and containing not more than 25 kg or 25 litre, which are ‘pre-packed’ as defined in clause (l) of section 2 of the Legal Metrology Act, 2009 where, the package in which the commodity is pre-packed or a label securely affixed thereto is required to bear the declarations under the provisions of the Legal Metrology Act, 2009 and the rules made thereunder.”
- This notification shall come into force with immediate effect, i.e. w.e.f. 16.01.2025.
(Source: Notification No. 02/2025-CT (Rate) dated 16.01.2025)
Lower GST on food inputs for weaker sections
- CBIC has notified a reduced rate of GST of 5% on food inputs used for food preparations intended for free distribution to economically weaker sections of the society
- CBIC has amended Notification No. 39/2017-CT (Rate) dated 18.10.2017 to add food inputs used for food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society to reduced GST rate on of 5% from earlier rate of 18%.
- This notification shall come into force with immediate effect, i.e., w.e.f. 01.01.2025.
(Source: Notification No. 03/2025-CT (Rate) dated 16.01.2025)
Taxability on old and used vehicles
- CBIC notified to provide that 18% GST shall be levied on margin value of sale of all old and used vehicles.
- GST on old and used vehicles has been increased from 12% to 18%, including EVs other than those specified at 18% - Sale of old and used petrol vehicles of engine capacity of 1200 cc or more & of length of 4000 mm or more; diesel vehicles of engine capacity of 1500 cc or more & of length of 4000 mm and SUVs.
- GST will apply only to the margin between purchase and selling prices (depreciated value or WDV if depreciation is claimed) and not on the value of the vehicle supplied.
[Source: Notification No. 04/2025-CT (Rate) dated 16.01.2025]
Change in Taxability of Restaurant Service – Specified Premises
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- The CBIC has amended the definition of ‘specified premises’ (from the services rate and exemption notifications) to link it with actual value of supply of any unit of accommodation provided by the hotel and to make the rate of GST applicable on restaurant services in such hotels, for a given financial year, dependent upon the ‘value of supply’ of units of accommodation made in the preceding financial year. For this, taxpayers shall be required to opt and make a declaration in writing.
- Specified premises for a financial year shall mean-
(a) a premises from where the supplier has provided in the preceding financial year, ‘hotel accommodation’ service having the value of supply of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent;
- The following emerges out of above:
- Registered persons must file a declaration to classify premises as specified premises.
- Annexures VII, VIII, and IX are introduced for opt-in and opt-out declarations for such premises.
- Annexure VII is for opt-in declaration for registered person
- Annexure VIII is for opt-in declaration for person applying for registration
- Annexure IX is for opt-out declaration
- The above declarations shall be filed on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year. (for already registered persons)
- The above declaration shall be filed within fifteen days of obtaining acknowledgement for the registration application (for new taxpayers)
- This change in relation to “specified premises” shall be applicable w.e.f. 01-04-2025.
[Source: Notification No. 05/2025-CT (Rate) and
Notification No. 08/2025-CT (Rate) dated 16.01.2025]
Amendments to Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017
- The words “transmission and distribution” has been substituted with the words “transmission or distribution” in entry with S. No. 25A, in column (3).
- A new entry has been inserted at S. No. 36B with nil rate pertaining to services of insurance provided by the Motor Vehicle Accident Fund under the Motor Vehicles Act, 1988.
- In S. No. 69, in the entry in column (3), a new item has been inserted with nil rate for training partner approved by the National Skill Development Corporation.
- Omission of the definition of “declared tariff” at item (w) to paragraph 2 of the notification, w.e.f. 01.04.2025.
- Insertion of a new definition at item (zja) of “insurer” to assign the same meaning as assigned to it in sub-section (9) of section 2 of the Insurance Act, 1938.
- This notification shall come into force with immediate effect, i.e. 16.01.2025 except for the purpose of declared tariff.
(Source: Notification No. 06/2025-CT (Rate) dated 16.01.2025)
Change in Reverse Charge Mechanism
- CBIC has amended Notification No. 13/2017-Central Tax (Rate) to provide that GST liability on sponsorship services provided by the body corporates would be under Forward Charge Mechanism.
- Till 15.01.2025, the sponsorship services provided by all types of suppliers including body corporates shall be covered under Reverse Charge Mechanism. W.e.f. 16.01.2025, only ‘body corporates’ have been taken out of scope of revere charge mechanism.
- Also, taxpayers registered under composition levy scheme have been excluded from paying GST under Reverse Charge Mechanism on renting of any commercial / immovable property (other than residential dwelling).
- This shall be effective from 16.01.2025.
[Source: Notification No. 07/2025-CT (Rate) dated 16.01.2025]
Conditional exemption from Compensation Cess
- CBIC has granted exemption to intra-state and inter-state supply of taxable goods by a registered supplier to a registered recipient for export, from so much of the compensation cess leviable thereon under section 8 of the Goods and Services Tax (Compensation to States) Act, 2017, as is in excess of the amount calculated at the rate of 0.1 percent.
- The exemption from levy of cess shall be applicable to the amount which is in excess of 0.1%.
- The exemption shall be subject to nine conditions as per the notification.
- The registered supplier shall not be eligible for the above-mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice.
- The exemption shall be applicable w.e.f. 16.01.2025.
(Source: Notification No. 01/2025-Compensation Cess (Rate) dated 16.01.2025)
Amended Guidelines on Arrest & Bail in GST
The grounds of arrest must be explained to the arrested person and also furnished to him in writing as an Annexure to the Arrest Memo. Acknowledgement of the same should be taken from the arrested person at the time of service of the Arrest Memo.
(Source: Instruction No. 01/2025-GST dated 13.01.2025
issued by CBIC, GST-Investigation Wing, New Delhi)
Generation Date for Draft GSTR 2B for December, 2024
- This is GSTN has advised that in light of the extended due dates for filing GSTR-1 and GSTR-3B returns for the month of December 2024 (Quarter October-December, 2024) as per Notifications No. 01/2025 and 02/2025 dated 10th January 2025, the Draft GSTR-2B for the month of December, 2024 (Quarter October-December, 2024) will now be generated on 16th January, 2025 in accordance with the rule 60 of CGST Rules, 2017.
- Taxpayers can recompute Draft GSTR-2B if any action is taken in IMS after the generation of the same GSTR-2B on or after 16th January, 2025.
(Source: GSTN Advisory dated 14.01.2025)
New Advisory for Waiver Scheme under Section 128A
- With reference to GSTN’s earlier advisory issued by GSTN on 29.12.2024, (see link https://services.gst.gov.in/services/advisoryandreleases/read/564), GSTN has advised that:
- Both Forms GST SPL 01 and GST SPL 02 are available in the GST portal and the taxpayers can file applications under waiver scheme.
- One of the eligible conditions for filing application under waiver scheme is to withdraw the appeal applications filed against the demand order/notice/statement for which waiver application is to be submitted.
- For the appeal applications (APL 01) filed before First Appellate authority, withdrawal option is already available in the GST portal.
- For the appeal applications (APL 01) filed before 21.03.2023, withdrawal option is not available in GST portal. For such cases, the taxpayers are advised to submit their request for withdrawal of appeal applications to the concerned Appellate Authority. The Appellate authority will forward such requests to GSTN through State Nodal officer for withdrawal of such appeal applications (i.e. filed before 21.03.2023 and not disposed off) from backend.
- Taxpayers can report difficulties to https://selfservice.gstsystem.in by raising a ticket under category “Issues related to Waiver Scheme”.
(Source: GSTN Advisory dated 14.01.2025)
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