Upcoming GST Council Meeting: Key Rate Revisions and Insurance Focus

The GST Council meeting, expected between December 20-25 in Rajasthan, will focus on critical rate changes in insurance and goods sectors. This 55th meeting, chaired by Finance Minister Nirmala Sitharaman, is likely to revise GST rates on insurance premiums, packaged drinking water, bicycles, exercise notebooks, and high-end items, aiming to support consumers while balancing revenue needs.

Key Proposals and Anticipated Changes

Insurance Premium GST Relief

The GoM on insurance is proposing GST exemptions for senior citizens on health insurance and term life premiums:

Current rates: Health and term insurance (18%); endowment plans (4.5% first year, 2.25% subsequent); single premium annuities (1.8%).

Proposed changes: Relief for senior citizens, especially on policies with ₹5-lakh coverage, supporting affordability.

Proposed GST Adjustments on Goods

The GoM on rate rationalization recommends lowering GST to 5% on select consumer items:

Packaged drinking water (20+ liters), bicycles (under ₹10,000), exercise notebooks.

Increasing GST to 28% on luxury items: wristwatches (above ₹25,000) and shoes (above ₹15,000).

These adjustments aim to generate ₹22,000 crore in revenue, balancing rate cuts while maintaining fiscal health.

Expanded GST Rate Framework

Additional rate revisions may include lowering 12% GST items like hair dryers and beauty products. India’s GST structure features primary rates of 5%, 12%, 18%, and 28%, with special rates for rough diamonds (0.25%), affordable housing (1%), and gold (3%).

What’s Next?

The final agenda will be set closer to the meeting date, highlighting potential rate reductions and exemptions to streamline GST for greater economic inclusivity.

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