Skill Training Providers to be Exempt from GST, Announces FM

In a series of significant announcements following the 55th GST Council meeting, Finance Minister Nirmala Sitharaman outlined measures aimed at simplifying the Goods and Services Tax (GST) process for small businesses and skill training providers, as well as providing clarity on the GST structure for electric vehicles (EVs).

Sitharaman confirmed the Council's approval of a concept note designed to simplify the GST registration process for smaller companies. This initiative is expected to reduce administrative burdens and encourage ease of doing business for small enterprises across the country.

Another major decision that was announced pertains to skilled training providers. Sitharaman revealed that the Council had approved an exemption from GST for skill training partners, which would further incentivize skill development in the country. However, she clarified that an official notification will be issued to formalize this exemption.

On the topic of the compensation cess, Sitharaman informed the media that the Group of Ministers (GoM) has yet to set a specific timeline for addressing the issue. As of now, no concrete changes regarding the compensation cess have been finalized.

In addition, the Central Board of Indirect Taxes and Customs (CBIC) provided a clarification regarding the compensation cess on SUVs. The CBIC confirmed that the cess will be applied prospectively, meaning it will not affect vehicles already sold.

On the subject of GST for electric vehicles (EVs), Sitharaman reiterated the government's commitment to promoting the adoption of EVs. She confirmed that new electric vehicles will attract a 5% GST, in line with the government's push for cleaner, more sustainable transportation options.

However, in a key clarification, Sitharaman addressed the tax implications for used EVs. She stated that used EVs sold between individuals will not attract GST. On the other hand, used EVs bought by companies, or those that have been modified and then resold, will be subject to an 18% GST on the margin value between the purchase and selling price.

Sitharaman emphasized that the decision to impose an 18% GST on used EVs was not made in haste. While the Centre initially proposed a 5% rate, the final decision was reached after extensive discussions within the GST Council to ensure a fair and balanced approach.

These decisions by the GST Council are expected to streamline the GST system, provide relief to small businesses, and foster the growth of the electric vehicle market in India.