55th GST Council Meeting: Rate Cut On Insurance, Aviation Turbine Fuel & Sin Goods, Tax On Used Cars In Focus

The 55th Goods and Services Taxes or GST Council Meeting is slatred to be held on Saturday, December 21. The council meeting will be headed by the country's finance minister Nirmala Sitharaman. Later in the day, at 18:00 IST, the FM will address the media.

GST Council Meeting

These meetings are crucial, as they involve stakeholders from all the Indian states. The GST Council consists of a total of 33 members, including the Union Finance Minister Nirmala Sitharaman, the Ministers of State Pankaj Chaudhary, and the Finance Ministers of all the states and union territories of India.

Elements In Focus

The Key Focus Area of this meeting is expected to revolve around elements that are the centre of economic activities. One of the main principle points of discussion has been GST cut on Health and life insurance. Currently, a GST of 18 per cent is levied on entire life insurance and health insurance.

This has been a sensitive issue, with many voices from inside and outside the government demanding for a cut in the country.

Today, the GST regime consists of four slabs. This includes 5, 12, 18, and 28 per cent slabs.

Another crucial issue is the rate on ATF, or Aviation Turbine Fuel, the cornerstone of the civil aviation industry. As of today, ATF, like petrol and diesel does not come under the GST regime. It instead is subject to tax levied by states and an 11 per cent central excise duty.

Special GST On Sin Goods

Bringing ATF under the GST regime would bring about standardisation to the ATF side of aviation business in India.

Recently, reports emerged that the government was ruminating over charging a special tax of 35 per cent special GST on sin goods like tobacco and aerated beverages.

However, just like bringing fuel under the GST regime, this remains a bottleneck issue, as the states stand to lose out on the tax levied on these products, thereby jeopardising a revenue stream for state governments that may have been strained by the GST regime.

Another issue in focus is taxation on sin goods, along with consumer goods. Recently, reports emerged that the government was ruminating over charging a special tax of 35 per cent special GST on sin goods like tobacco and aerated beverages.

In addition, the report also suggested shifting items within the existing slabs. The report also claimed that prices of ready-made garments (RMG) may also increase. Along with that, prices on other premium goods handbags, watches and cosmetics as well.

In addition, reports also suggest, that there could also be an additional 18 per cent GST on used cars.