Union Finance Minister Nirmala Sitharaman chairs the 55th meeting of the GST Council, in Jaisalmer, on December 21, 2024.
| Photo Credit: PTI
A much-anticipated review of the Goods and Services Tax (GST) levies on life and health insurance policies was put off by the apex body in charge of the indirect tax regime, the GST Council at its 55th meeting on Saturday (December 21, 2024), as some members sought more discussions on the matter before taking a final call.
A Group of Ministers (GoM) under Bihar Deputy Chief Minister Samrat Chaudhary is now expected to meet afresh to deliberate on the insurance levies once more before coming back to the Council with its recommendations. Moreover, rate rationalisation suggestions pertaining to about 150 items, including a price-based differential levy for garments, and 5% levies for packaged drinking water, and bicycles priced under ₹10,000, were also put off till the Council’s next meeting.
The Council, chaired by Union Finance Minister Nirmala Sitharaman, which met in Jaisalmer, also decided to grant more time to a ministerial group tasked with suggesting a roadmap for dealing with the GST Compensation Cess levies on several items that are scheduled for a March 2026 sunset.
The Council did agree on some rate changes, including exempting gene therapy and long-range surface to air missiles (LRSAMs) from the tax, raising the levies on used car sales, including electric vehicles, to 18% from 12%, and clarifying how pepper and raisin supplies by farmers, and popcorn should be taxed. The Council has decided to tax sweetened or caramelised popcorn 18%, and levy 5% on the salty and spicy varieties that are not pre-packed and labelled, and 12% for labelled and pre-packaged savoury popcorn.
A proposal to levy GST on charges collected by municipalities for granting Floor Space Index (FSI) to builders, presented to the Council on Saturday, was put off for further examination at the Centre’s behest on the ground that this amount relates to municipalities and local authorities. It was also agreed upon by Council members that gift vouchers are not liable to attract GST nor are penal charges imposed on borrowers by banks and non-banking finance companies failing to comply with loan conditions.
Ms. Sitharaman announced that the Council had agreed to a reduction in the GST levy on fortified rice kernels that are supplied with an intent to pass them on the public distribution system (PDS) to benefit the poor, to 5% from 18%.
“Gene therapy that is now critical for dealing with life-threatening diseases, so have been totally exempted [from GST]. LRSAM systems are very important in defence, so we have decided to extend the exemption on the systems, sub-systems, equipment, parts, sub-parts, tools, test equipment and software meant for their assembly or manufacture from Integrated GST levies,” she conveyed after the Council’s meeting.
Separately, a ministerial group would be set up to examine tax levies by States hit by a natural disaster. “On the request of State of Andhra Pradesh, the Council recommended that a GoM be constituted to examine the legal and structural issues, and recommend a uniform policy on imposition of levy in case of a natural disaster or calamity in the State,” the Finance Ministry said in a statement.
Published – December 21, 2024 08:11 pm IST