GST Council meeting: During the 54th GST Council meeting, the renting of commercial properties has been brought under the Reverse Charge Mechanism (RCM), according to Revenue Secretary Sanay Malhotra. The decision aims to simplify compliance for businesses and increase the efficiency of tax collection.Under the RCM, the liability to pay GST will now shift from the supplier (landlord) to the recipient (tenant) of commercial rental services. This is expected to provide more transparency and reduce potential evasion.The meeting, chaired by Union Finance Minister Nirmala Sitharaman , also made several other key decisions aimed at streamlining tax structures.
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Rate reduction on select snacks
The Council also announced a reduction in GST on select snacks, lowering the rate from 18 per cent to 12 per cent, offering some relief to consumers.
Tax exemption for research funding to universities
Funds allocated for research to universities established by central or state legislation, or those that have received income tax exemptions, will now be exempt from GST. This step is aimed at fostering academic research and easing financial constraints on educational institutions.
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IGST concerns and formation of a new committee
Finance Minister Nirmala Sitharaman also highlighted concerns regarding the negative balance on IGST. A committee of secretaries, under the additional secretary in revenue, will be formed to address these issues. The committee will include officials from both the Centre and the states to explore solutions, including retrieving excess IGST already given to states.
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Compensation cess and future repayments
The Council discussed the projected surplus of Rs 40,000 crore from the Compensation Cess after the repayment of loans. The cess will continue to be collected until March 2026 to ensure loans and interest are fully repaid by January 2026. A Group of Ministers (GoM) will be established to determine the future course of action regarding the Compensation Cess.
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