Suspense Crime Sach Ka Dam
The 55th meeting of the GST Council chaired by Finance Minister Nirmala Sitharaman will be held in Jaisalmer, Rajasthan on Saturday. Many important announcements can be made in this meeting. The first announcement is that there can be a gift of GST exemption on insurance premium. Apart from this, the government can consider increasing the tax rate on expensive wrist watches, shoes and apparel and bringing a separate 35 percent tax slab for harmful goods. There is a possibility of discussion on rate changes in about 148 items in the 55th meeting. Apart from this, discussions will also be held on bringing Aviation Turbine Fuel (ATF), a major component of the operating cost of the aviation industry, under the ambit of GST. It is proposed to reduce the GST rate on food delivery platforms like Swiggy and Zomato from the current 18% (with ITC) to five percent (without input tax credit).
Preparations to increase tax on old vehicles
According to sources, the Fitment Committee (which comprises tax officials from the Centre and states) has proposed to increase the tax rate on sale of used electric vehicles as well as small petrol and diesel vehicles from the current 12% to 18%. This hike will bring old small cars and electric vehicles at par with old large vehicles. Apart from this, the Group of Ministers (GoM) on GST compensation cess is likely to get a six-month extension till June 2025 to submit its report. The compensation cess regime will expire in March 2026 and the GST Council has constituted a committee of ministers led by Union Minister of State for Finance Pankaj Chaudhary to decide the future text of the cess. In the GST regime, compensation cess is levied at various rates in addition to the 28% tax on disadvantageous goods. The proceeds from the cess were originally planned for five years after the implementation of GST or till June 2022.
There will be a big decision regarding tax exemption on premium
A major issue in the meeting is to decide the GST rate on health and life insurance. The group of ministers constituted by the council under the chairmanship of Bihar Deputy Chief Minister Samrat Chaudhary had agreed in its meeting in November to exempt the insurance premium paid for term life insurance policies from GST. Apart from this, it has been proposed to exempt the premium paid by senior citizens for health insurance ‘cover’ from tax. Apart from senior citizens, it is also proposed to exempt from GST the premium paid for health insurance up to Rs 5 lakh by other persons. It is expected to be announced in the meeting to be held on Saturday. If this happens, crores of people of the country will get great relief.
Tax on readymade clothes may increase
The group of ministers also proposed rationalization of tax rates on readymade garments. They have proposed 5% GST on readymade garments costing up to Rs 1,500 and 18% GST on garments costing between Rs 1,500 and Rs 10,000. Apparel costing more than Rs 10,000 will be taxed at 28%. The group of ministers has also proposed to increase the GST rate on shoes costing more than Rs 15,000 per pair from 18% to 28%. In the last meeting held on October 19, it was also proposed to increase the GST rate on wrist watches costing more than Rs 25,000 from 18% to 28%.
