 |
|
The 54th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman, witnessed significant discussions on various tax-related matters. A key highlight was the formation of a Group of Ministers (GoM) to comprehensively examine the 18% GST levied on health insurance. This move stems from concerns about the financial burden on individuals seeking health insurance, particularly vulnerable groups like senior citizens. The GoM, tasked with delivering a report by the end of October, will delve into the implications of reducing the tax burden, potentially exempting specific categories of policyholders, and finding the most equitable solution for the country's insurance landscape.
The Council's decision to defer a concrete decision on the health insurance GST rate until the November meeting underscores the complexity of the issue. While the intent to alleviate the financial strain on individuals seeking health insurance is clear, the Council acknowledges the need for a thorough analysis and careful consideration of the potential ramifications of any changes. This approach reflects a commitment to balancing the need for revenue generation with the goal of promoting accessibility and affordability of health insurance for all citizens.
Beyond health insurance, the meeting addressed other crucial aspects of the GST framework. The GST Compensation Cess, which was extended until March 2026, is set to be reviewed by a separate GoM. This GoM will be responsible for assessing each state's compensation dues and charting the course for the Cess beyond its current term. The Council also formed a Committee of Secretaries to address the ongoing challenge of the Integrated GST (IGST) balance. The Committee, chaired by the Additional Revenue Secretary, will work with representatives from both the Centre and the states to formulate a sustainable approach to managing IGST, ensuring a balanced and equitable distribution of funds.
The meeting also saw a number of announcements concerning specific GST rates and exemptions. The GST rate on specified cancer drugs was reduced from 12% to 5%, reflecting a commitment to easing the financial burden on patients battling cancer. The GST rate on namkeens was prospectively reduced from 18% to 12%, while government school boards were exempted from GST. The Council also clarified the place of supply for advertising services remitted by Indian entities to foreign firms and addressed the availability of input tax credits for vehicle dealers. Furthermore, the GST rate on car and motorcycle seats was raised to 28%, and a 5% GST was introduced for shared helicopter transport services and economy class air travel.
The meeting underscored the GST Council's ongoing efforts to refine the GST framework and ensure its effectiveness in driving economic growth. The Council's commitment to forming GoMs and committees to address complex issues like health insurance and the future of the Compensation Cess demonstrates a proactive approach to tackling challenges and navigating the evolving needs of the Indian economy. The Council's focus on clarity, transparency, and fairness in the application of GST regulations further strengthens its role in facilitating a stable and predictable tax environment for businesses and individuals alike.