Key Points
- The 55th GST Council meeting is likely to take place between December 20 and 25 in Rajasthan.
- The Council will discuss changes in GST rates for insurance products, goods, and services.
- Proposals include lowering GST rates on packaged drinking water, bicycles, and notebooks.
- There are suggestions to raise GST rates on luxury items like high-end wristwatches and shoes.
- These changes are expected to generate ₹22,000 crore in revenue.
- The GoM on insurance has recommended exempting premiums for senior citizens’ health insurance.
Looma News
The GST Council is likely to meet for its 55th meeting soon after Parliament’s winter session, expected to take place between December 20 and 25 in Rajasthan. The meeting will focus on several important issues, including changes to GST rates for various products, especially insurance. The government is considering a change to the tax structure for insurance premiums, with a particular focus on senior citizens and term life insurance policies.
The Group of Ministers (GoM) on insurance, led by Bihar’s Deputy Chief Minister Samrat Chaudhary, has finished its discussions and submitted its recommendations. The panel suggests exempting premiums paid on health insurance for senior citizens and term life insurance policies. Other types of insurance would remain taxed at the current rate of 18%. These changes aim to provide relief to senior citizens while keeping the overall tax structure the same for most policyholders.
In addition, another GoM focused on rate adjustments has recommended lowering GST rates on everyday items like 20-litre bottled water, bicycles, and exercise notebooks. The GST rate on these items would drop to 5%, from the current 18% and 12%. However, the GoM also proposed raising GST rates on high-end wristwatches and shoes, especially those priced above ₹15,000 and ₹25,000, respectively. These changes are expected to bring in ₹22,000 crore in revenue, helping to offset the potential loss from the insurance rate cuts.
The GST Council is expected to discuss these proposals at its upcoming meeting, along with the future of the compensation cess and other minor rate changes. If approved, these changes could have a major impact on consumers and businesses across various industries.
