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GST Council Meet: Finance Minister Nirmala Sitharaman is slated to meet her state counterparts on December 21
Finance Minister Nirmala Sitharaman,
Finance Minister Nirmala Sitharaman is slated to meet her state counterparts on December 21 for the 55th GST Council meeting in Rajasthan’s Jaisalmer.
The Council was initially scheduled to meet in November. The delay is due to the Assembly elections in Maharashtra and Jharkhand, and then the Winter Session of Parliament.
During the meeting, state finance ministers will present their recommendations for the 2025-26 Budget to be tabled on February 1, 2025.
The Council is also likely to take up some rationalisation exercises and slash tax rates on a number of common items from 12 per cent to 5 per cent as per the recommendations of a panel of state ministers.
The rate rationalisation aims to raise taxes on luxury and sin goods and provide relief on essential items. The Group of Ministers on rate rationalisation, also headed by Choudhary, has Kerala Finance Minister KN Balagopal, Uttar Pradesh Finance Minister Suresh Kumar Khanna, Karnataka Revenue Minister Krishna Byre Gowda, West Bengal Finance Minister Chandrima Bhattacharya and Rajasthan Medical and Health Services Minister Gajendra Singh as members.
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent. Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. The average GST rate has fallen below the revenue-neutral rate of 15.3 percent, prompting the need to start discussions on GST rate rationalisation.
The group of ministers (GoM) on health and life insurance GST, this October, broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens’ health insurance from GST.
In addition, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh has also been proposed for an exemption. An 18 per cent GST will, however, continue to be levied on premiums paid for policies with health insurance cover of over Rs 5 lakh.