55th GST Council Meeting: Focus on Health Insurance Premiums, ATF, and 'Sin Tax'
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New Delhi, Dec 21 (NationPress) As the 55th session of the GST Council was poised to commence in Jaisalmer on Saturday, presided over by Union Finance Minister Nirmala Sitharaman, the anticipated reduction in health insurance premium rates and the consideration of including Aviation Turbine Fuel (ATF) within the GST framework will be significant topics of discussion.
The GST Council is also expected to review the tax rates of approximately 150 items during this meeting, potentially enabling the Centre to raise an extra Rs 22,000 crore.
A crucial item on the agenda is the proposed reduction of rates on term health and life insurance premiums. The demand for a GST exemption or reduction on life and health insurance has been ongoing in the industry, as such a change would lessen the tax burden on both insurers and policyholders.
While the majority of the Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, advocated for a complete exemption on health and life policy premiums, some members proposed lowering the rate to 5 percent from the current 18 percent.
Furthermore, insurance policies that provide coverage of up to Rs 5 lakh may also benefit from GST relief.
Another critical topic is whether the 5 percent GST on delivery charges from food delivery services should be applied retrospectively from 2022. At present, food delivery companies do not incur GST on delivery charges.
Moreover, the GST Council is likely to discuss the matter of incorporating aviation turbine fuel into the GST framework.
Currently, the central excise duty of 11 percent is imposed on ATF, along with a 2 percent concession under the Regional Connectivity Scheme.
Additionally, there is a recent proposal from the GoM to implement a 'Sin Tax' on demerit goods such as tobacco and aerated drinks. At present, there is no distinct category for 'sin goods' within the GST structure.
The establishment of such a category would convey a powerful message that India prioritizes the health of its citizens over the profits of industries that rely on unhealthy practices, as per insights from industry experts.
Moreover, a new tax rate of 35 percent is anticipated for targeting sin goods.
