The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, commenced in Jaisalmer on Saturday with a packed agenda.
Key discussions include a proposed rate cut on health insurance premiums, the inclusion of Aviation Turbine Fuel (ATF) under GST, and a potential new tax category for demerit goods, dubbed the “sin tax.”
A major highlight of the meeting is the industry’s long-pending demand to reduce or exempt GST on term health and life insurance premiums.
The move could significantly lower costs for policyholders and insurers. While most members of the Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, support full exemption, some suggested reducing the rate from 18% to 5%. Policies offering coverage up to ₹5 lakh may also see GST relief.
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The Council will also decide whether the 5% GST on delivery charges by food delivery platforms will be applied retrospectively from 2022. Currently, delivery charges are exempt from GST, sparking debates over potential backdated payments.
Discussions on bringing ATF under GST are also on the agenda. At present, ATF attracts an 11% central excise duty with a 2% concession for the Regional Connectivity Scheme. Including ATF under GST could streamline the tax structure and impact the aviation sector.
Additionally, the Council may introduce a ‘sin tax’ on products like tobacco and aerated drinks. This would create a dedicated category for goods deemed harmful to public health. Experts believe this sends a strong message prioritizing public well-being over corporate profits. A new tax slab of 35% is also under consideration for these items.
The Council is expected to revise rates for nearly 150 items, potentially generating an additional ₹22,000 crore in revenue for the Centre.