FM Minister Nirmala Sitharaman Announces GST Exemptions for Hostels, Platform Tickets, and More

Finance Minister Nirmala Sitharaman announced that all hostels would now be exempt from GST, provided the monthly charges do not exceed Rs 20,000 per person, and the occupant stays for at least 90 days. The GST Council, in its recent meeting, extended exemptions beyond hostels run by educational institutions, benefiting students and working individuals in paying guest accommodations. The council also exempted GST on platform tickets, railway waiting room charges, golf cart fees, and employee stock options, while reworking registration systems to prevent fraud by bogus entities.

Further decisions included setting a 12% tax rate on items like milk cans, solar cookers, and paper cartons. Compensation cess on aerated beverages and energy drinks supplied to defense canteens' authorized customers was waived. The council recommended CGST Act amendments to exempt extra neutral alcohol (ENA) used in alcoholic beverages production from taxation, following the Centre's decision to relinquish its taxing authority on ENA.

In efforts to combat fraudulent input tax credit claims, the council proposed phased Aadhaar authentication for GST payer registration, piloted in Gujarat and Puducherry. Sitharaman noted registration at GST Suvidha Kendras would take about 15 minutes. The council introduced an amnesty scheme for defaulters and simplified appeal thresholds: Rs 20 lakh for GST Appellate Tribunal, Rs 1 crore for high courts, and Rs 2 crore for the Supreme Court. Taxpayers facing notices under Section 73 of the CGST Act from FY18 to FY20 can settle without interest or penalties if resolved by March.

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Sanjay Malhotra, revenue secretary, clarified that the government would not appeal amounts below these thresholds, except for policy matters. The council also reduced pre-deposit amounts for appeals and approved other procedural relaxations. Saurabh Agarwal of EYIndia stressed the need for a comprehensive approach to dispute resolution, advocating for an amnesty scheme, a national authority for advance rulings, and enhanced engagement with industries and audit efficiencies through sectoral committees and compliance standards.