BrainBuzz Academy

Context:
The 55th GST Council meeting, chaired by Union finance minister Nirmala Sitharaman in Jaisalmer, brought changes affecting the prices of various goods and services.
What becomes more expensive?
1) Used cars, including used EVs
The GST Council in a bid to promote the sales of new EVs has decided to raise the tax rate of used cars which also includes used EVs to 18% from the current 12%.
However, this is only for used cars by businesses. Private individuals can sell such used cars without attracting the GST.
2) Caramelised popcorn
Caramelised popcorn will continue to attract an 18% GST, while ‘ready-to-eat popcorn’, mixed with salt and spices, and has the essential character of namkeens, attracts a 5% GST currently if not pre-packaged and labelled. Also, pre-packaged and labelled ready-to-eat snacks/popcorns will attract 12% GST.
What becomes cheaper?
1) Gene therapy and IGST
The GST Council has totally exempted gene therapy from attracting any GST.
Meanwhile, it extended the exemption of IGST on surface-to-air missiles.
2) Rice kernels, AAC blocks, raisins, pepper
The GST Council has cut GST rates on the fortified rice kernels used for public distribution to 5% from 18% earlier.
AAC blocks with 50% fly ash will get a 12% GST rate.
Black pepper and raisins supplied directly by farmers will be exempt from GST.
3) Bank penal charges
No GST will be levied on penal charges imposed by banks and non-banking financial companies (NBFCs) on borrowers for not complying with loan terms.
4) Payment aggregators
Payment aggregators handling payments less than ₹2,000 will be eligible for a GST exemption, but this does not apply for payment gateways or fintech companies.
5) Compensation Cess
The compensation cess rate has been reduced to 0.1% on supplies to merchant exporters, which aligns it with the GST rate on such supplies.
6) Registration of small companies
Sitharaman said that amendments to the GST Acts have to be made to make it easier for small companies to get registered. For this, a concept note has received in-principle approvals.
Deferred decisions:
1) Aviation turbine fuel (ATF)
Many states didn't agree on bringing aviation turbine fuel under the GST ambit since it was a part of the crude petroleum diesel basket. Thus, GST was not imposed on it for the time being and the decision has been deferred and no panel will be appointed for this issue.”
ATF has also been kept out of the 'one-nation-one-tax' regime.
2) Floor Space Index (FSI)
The GST Council could not reach a decision on taxation related to Floor Space Index (FSI), and the matter has been deferred.
3) Calamity cess
The Council has decided to set up a Group of Ministers (GoM) to mull over allowing states to levy cess under GST to overcome financial distress after natural calamities.
The GST law provides for levy of special taxes for a specified period to raise additional resources during natural calamities or disasters.
4) Quick commerce, ecommerce, food delivery charges
The GST Council has deferred the decision to impose GST on quick commerce services, e-commerce, and food delivery platforms as no decision has been reached yet.
5) Health insurance premium
The GST Council has also deferred the decision to reduce the GST rate on insurance premiums due to pending comments of the regulator.
The GoM had examined exempting insurance premiums for term life insurance policies from GST and also the premium paid by senior citizens for health insurance coverage.
It had also suggested GST exemption on premiums paid by individuals other than senior citizens for health insurance with coverage of up to ₹5 lakh.
Life and medical insurance premiums attract a GST rate of 18%.
6) Rate rationalisation
"No report (on rate rationalisation) has been finalised," Sitharaman said, on the matter of tweaking rates on 148 items. The GoM will be given more time to decide.
Key Points to Ponder about GST:
— What is the purpose of introducing GST?
— What is the composition of the GST Council?
— What are the constitutional provisions related to the GST?
— How is tax shared among the center and the state?
— What is the difference between cess and surcharge?
— How is the GST an example of Cooperative federalism?
What is the GST Council?
About:
The GST Council is a constitutional body responsible for making recommendations on issues related to the implementation of the Goods and Services Tax (GST) in India.
It was set up to simplify the existing tax structure in India, where both the Centre and states levied multiple taxes making it more uniform across the country.
Constitutional Provisions:
The 101st Amendment Act, of 2016 paved the way for the introduction of GST. It came into effect in 1 July 2017 and was billed as an attempt to simplify the existing tax structure in India, where both the Centre and states levied multiple taxes, and to make it uniform.
The Amendment Act inserted a new Article 279-A in the Constitution, which empowers the President to constitute a GST Council or by an order.
Accordingly, the President issued the order in 2016 and constituted the Goods and Services Tax Council.
Members:
The members of the Council include the Union Finance Minister (Chairperson), the Union Minister of State (Finance) from the Centre.
Each state can nominate a minister in-charge of finance or taxation or any other minister as a member.
Functions:
Article 279A (4) empowers the Council for making recommendations to the Union and the states on important GST-related issues such as the goods and services that may be subject to or exempted from GST, model GST laws, and GST rates.
It decides on various rate slabs of GST and whether they need to be modified for certain product categories.
The Council also considers special rates for raising additional resources during natural calamities/disasters and special provisions for certain States.
Working:
The GST Council reaches decisions in its meetings by a majority of at least three-fourths of the weighted votes of the members present and voting.
A quorum of 50% of the total members is required to conduct a meeting.
The Central Government's vote carries a weightage of one-third of the total votes cast in a meeting.
The votes of all state governments combined have a weightage of two-thirds of the total votes cast.
The recommendations of the GST Council were earlier considered binding, but in 2022 the Supreme Court in Union of India v. Mohit Minerals Pvt. Ltd Case ruled that they are not binding, as both Parliament and State legislatures have "simultaneous" power to legislate on GST.
The main difference between a cess and a surcharge is that a cess is a tax levied on all taxpayers, while a surcharge is levied on high-income taxpayers: 
Cess:
A tax levied on all taxpayers with an income tax liability, regardless of income level. Cesses are often used to fund specific services, such as education or health, and the government can only use the proceeds for that purpose. For example, the health and education cess is levied at a rate of 4% on the income tax liability. 
Surcharge:
An additional tax on tax levied on taxpayers with high incomes. Surcharges are used to collect more revenue, which can be used for any purpose by the government. For example, a surcharge may be applied to income over ₹50 lakhs for individuals and ₹1 crore for companies.

Previous year UPSC Prelims Question Covering similar theme:
(1) What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? (UPSC CSE 2017)
1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to  increase  its foreign exchange reserves.
3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Ans: (a)

(2) Consider the following items: (2018)
1. Cereal grains hulled
2. Chicken eggs cooked
3. Fish processed and canned
4. Newspapers containing advertising material
Which of the above items is/are exempted under GST (Good and Services Tax)?
(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4

Ans: (c)

(3) What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?
(2017)
1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Ans: (a)

Why in the news?
India celebrates National Mathematics Day on December 22, marking the birth anniversary of the great mathematician Srinivasa Ramanujan. Initiated in 2012 by then-Prime Minister Manmohan Singh, the day honours Ramanujan's remarkable contributions to mathematics.
National Mathematics Day 2024: Theme
The theme for National Mathematics Day 2024 will be “Mathematics: The Bridge to Innovation and Progress." This theme projects that the concepts of mathematics are basic to several other developments in the field of science and technology. It is an effort to inspire and motivate young minds and problem-solving skills among students to understand the beauty of mathematics as a tool for innovation.
National Mathematics Day 2024: History
It was officially launched by then Prime Minister of India, Dr Manmohan Singh in December 2012, in conjunction with the 125th birth anniversary of S. Ramanujan. This was done in a bid to ensure that the generations to come in India emulate others by endeavouring in mathematics.
Ramanujan was born in 1887 and, in his short life span till the age of 32 years, he made outstanding findings in number theory, infinite series and continued fractions.
National Mathematics Day 2024: Significance
National Mathematics Day is significant as it pays tribute to the contributions of Ramanujan and inspires future generations of mathematicians.
The curriculum encourages appreciation of the subject of mathematics beyond mere rote learning, developing an understanding and interest in it.
The day is supposed to showcase the role of mathematics in activities forming the core of technology, engineering, economics and health care.
Different activities and competitions are held so that, through the means of mathematics, students may develop critical thinking and analyse any problem.
Contributions of Srinivasa Ramanujan:
Srinivasa Ramanujan made immense, path-breaking contributions to mathematics. These include:
Number Theory: The part played in the development of the theory of partition functions and the distribution of prime numbers. His magic number, 1729, is the smallest number that could be expressed as the sum of two cubes in two ways.
Infinite Series: He developed an efficient series to calculate π, which finds real application in numerical methods.
Mock Theta Functions: These are the functions which were originally discovered by Ramanujan and have great significance in modern modular form theory.
Continued Fractions: His work laid foundational principles for computational mathematics.
Here are some interesting facts about Srinivasa Ramanujan’s life and career:
📍Srinivasa Ramanujan was born on December 22, 1887, in Erode, Tamil Nadu, to a Brahmin Iyengar family. He became interested in math at a young age and mastered trigonometry by the age of 12. He then became eligible for a scholarship at the Government Arts College in Kumbakonam.
📍Ramanujan studied at the Government College in Kumbakonam, where he failed exams due to his dislike of non-mathematical subjects.
📍He began as a clerk at the Madras Port Trust in 1912, where his mathematical talent caught the attention of colleagues. One referred him to Professor G.H. Hardy at Trinity College, Cambridge. He met Hardy in 1913 and moved to the college.
📍In 1916, Ramanujan received his Bachelor of Science (BSc) degree. With Hardy's help, he published several papers on his subject. The two also collaborated on several joint projects.
📍In 1917, Ramanujan was elected to the London Mathematical Society. The next year, he was elected to the prestigious Royal Society for his work on Elliptic Functions and number theory. He also made history as the first Indian to become a Fellow of Trinity College.
📍Ramanujan returned to India in 1919 and breathed his last on April 26 next year, owing to deteriorating health. He was just 32 years old.
📍An anecdote from the biography ‘The Man Who Knew Infinity’ by Robert Kanigel highlights Ramanujan's brilliance. Hardy travelled on a taxi cab numbered 1729 to visit a sick Ramanujan. During their conversation, Hardy mentioned that it seemed to be a fairly ordinary number. Ramanujan pointed out that it is the smallest number that can be expressed as the sum of two cubes in two different ways (1729=1^3+12^3=9^3+10^3). While it may not be his greatest contribution, it is certainly one of the most memorable.