🟥 GST Council to Convene in Jaisalmer on December 21
The 55th GST Council Meeting, led by Union Finance Minister Nirmala Sitharaman, will take place on December 21, 2024, in Jaisalmer, Rajasthan. Key discussions will focus on tax reforms for insurance premiums and GST rate adjustments, with potential policy shifts affecting consumers and businesses.
Key Agenda
- Focus on Insurance Premiums
A Group of Ministers (GoM) has proposed:
GST Exemptions for:
Term life insurance policies.
Health insurance for senior citizens.
No GST on health insurance premiums up to ₹5 lakh for non-senior citizens.
Retaining the 18% GST rate for policies with coverage above ₹5 lakh.
- Rate Rationalisation on Goods
Recommendations from the GoM on rate adjustments include:
Reduced GST Rates:
Packaged drinking water (20L+) from 18% to 5%.
Bicycles (below ₹10,000) and exercise notebooks from 12% to 5%.
Increased GST Rates:
Shoes priced above ₹15,000/pair and luxury wristwatches above ₹25,000 from 18% to 28%.
If implemented, these changes could yield additional revenue of ₹22,000 crore.
Need for Rate Reforms
The four-tier GST structure (5%, 12%, 18%, and 28%) currently taxes essential items at lower rates and luxury goods at higher slabs. However, the average GST rate has dipped below the revenue-neutral rate of 15.3%, raising concerns about revenue deficits and prompting discussions on rationalising tax slabs.
Leadership and Decision-Making
The GoM on health and life insurance and rate rationalisation is led by Bihar Deputy CM Samrat Chaudhary.
Their recommendations will play a pivotal role in shaping outcomes.
Implications
For Consumers: Potential cost reductions on basic goods and insurance premiums for certain policies.
For Businesses: Revenue shifts due to tax rate adjustments.
The December 21 meeting is anticipated to be a turning point in GST policy, with wide-reaching effects on India’s tax framework.
