By Bulletin Times 
Major Borrower Relief: No GST on Loan Penal Charges, Says GST Council
Borrowers across India can breathe a sigh of relief as the GST Council has ruled out the imposition of GST on penal charges levied by banks and financial institutions. These charges, often incurred for missing EMIs or violating loan terms, will now be GST-exempt.
The decision was unveiled during the 55th GST Council meeting held in Jaisalmer, under the leadership of Finance Minister Nirmala Sitharaman. Highlighting the significance of the move, she stated, “Penal charges arising from non-adherence to loan agreements will now be exempt from GST, offering much-needed clarity and relief to borrowers.”
Key Highlights from the GST Council Meeting
Healthcare Boost: Tax Relief for Gene Therapy
Cutting-edge gene therapies will now be free of GST, a move designed to make life-saving treatments more accessible to patients.
Rate Revisions on Goods
Rice Kernels: Tax rate reduced to 5%.
Caramelised Popcorn: GST hiked to 18%.
Insurance Premium Taxation Decision Delayed
The council decided to hold off on altering GST rates for health and life insurance premiums, citing the need for input and recommendations from the Insurance Regulatory and Development Authority of India (IRDAI).
Transaction Threshold Relief for Payment Aggregators
Payment aggregators handling transactions below ₹2,000 will enjoy GST exemption. However, this benefit does not extend to payment gateways or other fintech platforms.
Unresolved Issues: Food Delivery and Aviation Fuel
The deliberations on whether GST should apply to delivery charges imposed by platforms like Swiggy and Zomato ended without a definitive conclusion.
States resisted including aviation turbine fuel (ATF) under GST, delaying any decision on this matter.
Calamity Cess Consideration
To aid states in managing natural disasters, the council proposed setting up a Group of Ministers to evaluate a 1% calamity cess on specific goods and services.
Simplified GST Registration for MSMEs
The council unveiled plans to streamline the GST registration process for MSMEs, aiming to reduce compliance hurdles and encourage participation.
Promoting Electric Mobility
A push towards green mobility was evident in the council’s decisions:
New Electric Vehicles (EVs): GST remains at 5%.
Used EVs: An 18% GST will apply only to the margin between the purchase and resale prices for businesses, while individual-to-individual sales remain exempt.
The council also deferred deliberations on rate rationalization, citing the need for further analysis by the Group of Ministers.
Finance Minister Sitharaman concluded by reiterating the council’s commitment to fostering a fair and transparent taxation environment while addressing pressing sectoral concerns.