GST Council meeting: The upcoming 55th GST Council meeting is scheduled to take place on Saturday (December 21) in Rajasthan’s Jaisalmer district. As per the information, the meeting will focus on several key topics including such as the GST framework for life and health insurance, tax rate rationalisation, and revisions to GST slabs. Ahead of this meeting, on December 16, the Group of Ministers (GoM) on health insurance submitted its recommendations to state and central revenue officials. These proposals will be examined by the Council during the Jaisalmer session.
The council will be chaired by Union Finance Minister Nirmala Sitharaman and comprising her state counterparts. In its previous meeting on September 9, the council had tasked the GoM to finalise the report on GST levy on insurance by October-end. Following that, the group of ministers (GoM) on health and life insurance GST last month met and broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens’ health insurance from GST.
Here are key recommendations by the GoM:
- The GoM proposed an exemption of GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh.
- It has suggested that the council rejig tax rates on a host of goods, including packaged drinking water, bicycles, exercise notebooks, luxury wristwatches, and shoes.
- The GoM on rate rationalisation proposed reducing GST on packaged drinking water of 20 litres and above to 5 per cent from 18 per cent.
- It has also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent.
- The GoM proposed to hike tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35 per cent from the present 28 per cent
- It also proposed hiking GST on wristwatches costing above Rs 25,000 from 18 per cent to 28 per cent.
What is GST?
Bihar Deputy Chief Minister Samrat Chaudhary is the convenor of the 13-member GoM on health and life insurance and the 6-member GoM on rate rationalisation. Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent. Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. The average GST rate has fallen below the revenue-neutral rate of 15.3 per cent, prompting the need to start discussions on GST rate rationalisation.
(With PTI inputs)
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