Question 1

The GST Council's press releases immediately change the tax rates applicable to businesses.

Accepted Answer

The Council only makes recommendations. Legal changes occur only when the CBIC (for Central GST) and State Governments (for State GST) issue official gazette notifications under Section 9 of the CGST Act.

Question 2

All payment aggregators and fintech services were completely exempted from GST.

Accepted Answer

The exemption specifically applies only to payment aggregators handling transactions below Rs 2,000, and explicitly excludes payment gateways that do not handle actual fund settlements.

Question 3

Consider the following statements regarding the changes notified by the CBIC based on the 55th GST Council recommendations:
1. The GST rate on the margin of sale for all used Electric Vehicles (EVs) has been reduced from 18% to 12% to promote green mobility.
2. Sponsorship services provided by body corporates have been shifted from the Reverse Charge Mechanism (RCM) to the Forward Charge Mechanism (FCM).
3. Pre-deposit requirements for filing appeals before the Appellate Tribunal in penalty-only cases have been fixed at 10%.
How many of the above statements are correct?

Accepted Answer

(b) Only two — Statement 1 is incorrect because the GST rate on the margin of sale for used EVs was actually INCREASED from 12% to 18% to align with non-electric used vehicles. Statement 2 is correct, as corporate sponsorships now fall under the Forward Charge Mechanism. Statement 3 is correct, as the pre-deposit requirement was reduced to 10% for penalty-only appeals.

Question 4

Match the specific goods/services (List I) with their updated GST treatment as per the 55th GST Council notifications (List II):
List I:
A. Fortified Rice Kernels
B. Gene Therapy
C. Autoclaved Aerated Concrete (AAC) blocks with >50% fly ash
D. Penal charges by Banks/NBFCs

List II:
1. Exempted from GST
2. GST increased to 12%
3. GST reduced to 5%
4. Clarified as non-taxable

Select the correct code:

Accepted Answer

(a) A-3, B-1, C-2, D-4 — Fortified Rice Kernels were reduced from 18% to 5% (A-3). Gene therapy was fully exempted (B-1). AAC blocks with fly ash saw an increase from 5% to 12% (C-2). Penal charges by banks were clarified as not attracting GST (D-4).

Question 5

Assertion (A): The CBIC notification omitted the definition of 'declared tariff' for determining the taxability of hotel accommodations effective April 2025.
Reason (R): The GST Council recommended linking the taxability of hotel accommodations solely to the star rating of the hotel to simplify compliance.
Select the correct answer:

Accepted Answer

(c) A is true but R is false — The assertion is true; the concept of 'declared tariff' was omitted. However, the reason is false. The taxability is not linked to the star rating, but rather to the actual value of supply in the preceding financial year (exceeding Rs 7,500), bringing the tax base closer to real transaction values rather than theoretical tariffs.

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