GST Council defers proposal to cut tax on health, term insurance; discusses potential GST changes for other goods
PTC Web Desk: The proposal to reduce GST on health and term insurance has been postponed for now. The GST Council decided to defer the decision on reducing the tax on life insurance and health insurance following opposition from several states. The Council has asked ministers to conduct further study on the matter.
The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, began in Jaisalmer on Saturday at around 11 am. Bihar’s Finance Minister Samrat Choudhary confirmed that the proposal to lower GST on insurance premiums would be postponed until the next meeting. The meeting is taking place in two phases. The first phase continued from 11 am until 1.15 pm, followed by the second phase, which will start at 4.30 pm.
Several key officials, including Union Minister of State for Finance Pankaj Chaudhary, Chief Ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, Rajasthan, and Telangana, along with senior officials from the Finance Ministry and Economic Affairs, are participating in the discussions.
The meeting is expected to bring changes in GST rates for several items. Based on the recommendations of the Group of Ministers, GST on certain items may be reduced, while luxury items might see a tax hike.
Potential GST Rate changes discussed
Bottled water, notebooks, and bicycles priced under Rs 10,000 may see their GST rate reduced from 18% to 5%.
The GST on online food delivery could also be reduced from 18% to 5%, making online ordering more affordable for consumers and benefiting food delivery companies.
Possible GST hike on small cars and used vehicles: There is a proposal to increase GST on small petrol and diesel cars from 12% to 18%. The GST on used cars, currently set at 12%, could rise to 18%.
Tobacco and Luxury Goods: A proposal to increase taxes on tobacco products, including cigarettes and gutka, is also under consideration, with a suggestion to raise the GST from 28% to 35%.
GST on branded shoes priced above Rs 15,000 and luxury watches priced over Rs 25,000 is expected to rise from 18% to 28%.
- With inputs from agencies
