 Jaisalmer, Dec 21:
Agencies
A GST Council meeting on Saturday postponed a decision on reducing taxes on health and life insurance, while the much talked- about GoM recommendation of rate rejig in 148 items was not tabled before the Council.
Some members of the Council, chaired by Union Finance Minster Nirmala Sitharaman and comprising her state counterparts, felt that more deliberations were required before a final decision could be arrived at with regard to insurance taxation.
Bihar Deputy Chief Minister Samrat Chaudhary, who heads the panel on GoM on insurance, said one more meeting is required to take a call on taxation of group, individual, senior citizen’s policies.
“Some (Council) members said more discussions required. We (GoM) will meet in January again,” Chaudhary told reporters here.
Besides, the report of the GoM on rate rationalisation, which had recommended tweaks in 148 items, was not tabled before the Council.
“We will submit the GoM report on rate rationalisation in next meeting of Council,” said Chaudhary who is the convenor of the panel.
The ongoing Council meeting will also deliberate on bringing Aviation Turbine Fuel (ATF) in Goods and Services Tax fold.
Several proposals of Fitment Committee, comprising officials from the Centre and states’ GST departments would come up for review before the Council.
One of the proposals include cutting taxes on food delivery platforms like Swiggy and Zomato, to 5 per cent (without input tax credit), from the current 18 per cent (with ITC).
It is likely to have proposed a rate hike on sale of used EVs as well as small petrol and diesel vehicles to 18 per cent from the current 12 per cent. This hike would bring used and old smaller cars and EVs at par with old larger vehicles, according to sources.
Also, the Group of Ministers (GoM) on GST compensation cess is likely to get a six-month extension till June 2025, to submit their report. The compensation cess regime comes to an end in March 2026, and the GST Council has set up a panel of ministers, under Union Minis Some members of the Council felt that more deliberations were required before a final decision could be arrived at with regard to insurance taxation.
The GoM on insurance had recommended exempting insurance premiums paid for term life insurance policies from GST. Also premium paid by senior citizens towards health insurance cover has been proposed to be exempted from the tax.
Besides, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted.
However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.
The GST rate rationalisation GoM report, which has suggested rate tweaks in 148 items, was not tabled before the Council and would be taken up in next Council meeting.
The GoM earlier this month had arrived at a consensus to hike tax on sin goods, like aerated beverages, cigarettes, tobacco and related products, to 35 per cent from the present 28 per cent.
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at highest bracket of 28 per cent, while packed food and essential items are at the lowest 5 per cent slab.
The GoM had also decided to propose rationalising tax rates on apparel. As per the decision, ready-made garments costing up to Rs 1,500 would attract 5 per cent GST, those between Rs 1,500-10,000 would attract 18 per cent. Garments costing above Rs 10,000 would attract 28 per cent tax.
Currently, garments costing up to Rs 1,000 attract 5 per cent GST, while those above that attract 12 per cent. The GoM also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent. It also proposed hiking the GST rate on wrist watches above Rs 25,000 from 18 per cent to 28 per cent.
The GoM had proposed reducing GST on packaged drinking water of 20 litre and above to 5 per cent from 18 per cent, and reducing tax rate on bicycles costing less than Rs 10,000 to 5 per cent, from 12 per cent. Also, GST on exercise notebooks would be reduced to 5 per cent from 12 per cent. |
