GST Council Meet:GST For Skill Training Providers And Small Businesses? FM Sitharaman Clarifies

Union Finance Minister Nirmala Sitharaman shared important updates following the 55th GST Council meeting, aimed at simplifying GST processes for small businesses and skill training providers.

The GST Council approved a concept note to streamline the GST registration process for small businesses, promoting ease of compliance. This move reflects the government’s focus on supporting small enterprises and encouraging their growth.

GST Exemption for Skill Training Providers

In a significant decision, the Finance Minister announced that skill training providers will now be exempt from GST, with formal notification expected soon. This exemption is designed to make skill development more accessible and affordable.

Updates on Compensation Cess

The GST Compensation Cess, introduced in 2017 to compensate states for revenue losses after GST implementation, remains unchanged for now. The Finance Minister clarified that the Group of Ministers has not set a timeline to resolve related issues.
Additionally, the cess on SUVs will apply only to vehicles sold moving forward, ensuring previously sold SUVs remain unaffected. This clarification provides relief to existing SUV owners.
SUV stands for "Sports Utility Vehicle," a rather nebulous term that often describes sleek, fashionable cars that can tackle rough terrain with their usual 4x4 capacity while yet providing beautiful city driving. Any size SUV is possible, including tiny, medium, and giant.

GST for Electric Vehicles (EVs)

The GST Council announced a 5% GST rate on new electric vehicles (EVs), aligning it with the tax rates of new petrol and diesel vehicles. However, second-hand EVs sold between individuals will not attract GST, while those sold after modifications by companies or dealers will have an 18% GST rate.
This decision has raised concerns about the affordability of used EVs, potentially affecting their adoption.

The GST Council’s recent decisions highlight efforts to simplify tax structures, promote sustainability through EV adoption, and support small businesses. Formal notifications are awaited for several changes, ensuring clarity and implementation in the coming months.