55th GST Council meeting: It may reduce tax rates on life and health insurance premiums, increase tax rates on luxury wristwatches, shoes and apparels, among other decisions.
The 55th meeting of the GST Council is scheduled to be held in Jaisalmer, Rajasthan on Saturday.
55th GST Council Meeting: The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers, is scheduled to be held in Jaisalmer, Rajasthan on Saturday. The apex body on indirect taxes is expected to discuss significant rate changes in various categories, including life and health insurance, luxury goods, and aviation turbine fuel (ATF).
Important tips:
Life and health insurance
The council is expected to consider proposals to reduce GST rates on life and health insurance premiums. Recommendations include:
- Exemption GST on premium of term life insurance policies.
- Exception of GST on health insurance premiums paid by senior citizens.
- Exemption GST on health insurance premium for policies up to ₹5 lakh for persons other than senior citizens.
- Continuation of 18% GST On premiums for policies with coverage exceeding ₹5 lakh.
Goods of luxury and goods of sin
The Group of Ministers (GoM) on GST Rate Rationalization has recommended tax increases on luxury and sin goods, including:
- Wrist watches Price above ₹25,000: Increase in GST 18% to 28%.
- shoes Price above ₹15,000 per pair: Increase in GST 18% to 28%.
- Readymade Garments:
- Cost up to ₹1,500: On GST 5%.
- Cost between ₹1,500 and ₹10,000: On GST 18%.
- Cost above ₹10,000: On GST 28%.
- The goods of sin Like aerated drinks, cigarettes and tobacco: introduction of a 35% tax slab From the current 28%.
Tax cut
- Packaged drinking water (20 liters and above): Reduction in GST From 18% to 5%.
- Bicycles Cost below ₹10,000: GST reduced From 12% to 5%.
- Exercise Notebook: GST Reduction From 12% to 5%.
Aviation Turbine Fuel (ATF)
The Council is expected to consider subsuming ATF under GST. If approved, the move will bring uniformity in taxation and allow airlines to claim input tax credit (ITC) on ATF, a long-standing demand of the aviation industry.
Currently, ATF is taxed through a combination of central excise duty and state-level VAT. Its inclusion in GST is expected to reduce operational costs of airlines and streamline the tax structure.
Other expectations
- A debate in the council is expected. 148 items For potential rate changes, including used electric vehicles (EVs) and small petrol and diesel vehicles, which may have rate increases. 12% to 18%. “The net revenue impact of rate hikes will be positive,” officials said earlier.
- Recommendations for Extension of GST Compensatory Cess System June 2025.
- Proposal to reduce GST rate on food delivery platforms like Swiggy and Zomato from existing 18% (with ITC) To 5% (without ITC).
When GST was introduced on July 1, 2017, five commodities—crude oil, natural gas, petrol, diesel, and ATF—were excluded from the GST framework. VAT continued to be levied. Revising their inclusion under GST has been a key demand of many industries, particularly aviation.