GST Council Approves Track and Trace Mechanism, Cuts Rates on Key Items

The GST Council has approved the 'Track and Trace Mechanism' to monitor evasion-prone goods, requiring unique markings for tracing. Changes include reducing GST rates on fortified rice kernel, exempting gene therapy, and simplifying voucher transactions. New regulations aim to reduce legal ambiguity and improve compliance.

In a crucial step toward curbing tax evasion, the GST Council has given the green light to a 'Track and Trace Mechanism' targeting commodities prone to evasion. This strategy involves attaching unique identification marks to goods, ensuring traceability throughout the supply chain, according to the finance ministry.

The council meeting concluded with several rate adjustments and exemptions. Finance Minister Nirmala Sitharaman announced the reduction of GST from 18% to 5% on fortified rice kernel and the exemption of GST on gene therapy. Furthermore, the Council decided to lower the compensation cess to 0.1% for supplies to merchant exporters.

Other notable decisions include the clarification of regulations surrounding vouchers and the decision to abstain from levying GST on bank and NBFC penal charges for loan non-compliance. These moves aim to streamline processes and eliminate ambiguities, fostering a more efficient tax environment.

(With inputs from agencies.)