Last Updated:December 03, 2024, 22:38 IST

The CBIC on Tuesday said the GoM on GST rate rationalisation is yet to submit its recommendations to the GST Council, which is the final decision making body in fixation of tax rates.

It said the GST Council is empowered to recommend GST rates including changes to them. (Representative image)

The CBIC on Tuesday said the GoM on GST rate rationalisation is yet to submit its recommendations to the GST Council, which is the final decision making body in fixation of tax rates.

In a post on X, the Central Board of Indirect Taxes and Customs (CBIC) said the GST Council, chaired by Union Finance Minister and comprising state counterparts, has not yet deliberated on any GST rate changes and the group of ministers (GoM) is only a “recommendatory” body.

The clarification from CBIC came a day after reports that the GoM on GST rate rationalisation has suggested tax rate on sin goods like aerated beverages, cigarettes, tobacco and related products be hiked to 35 per cent, from the current 28 per cent.

“The GST Council has not yet deliberated on any GST rate changes. The Council has not even received the recommendations of the GoM. In fact the GoM has yet to finalise and present its recommendations to the Council after which the Council will take a final view on the recommendations of the GoM,” the CBIC said.

It said the GST Council is empowered to recommend GST rates including changes to them.

Finance Minister Nirmala Sitharaman in a post on X said Finance Ministers from various states in the GoM are working to address GST rate changes.

“Thereafter, the GST Council, consisting of all state FMs will take up their recommendations, when they next meet,” Sitharaman said.

The GST Council had constituted a Group of Ministers (GoM) to look into the GST rate rationalisation apart from certain other issues referred by the GST Council.

The GoM comprises ministers from the states of Bihar, Uttar Pradesh, Rajasthan, West Bengal, Karnataka and Kerala, with the deputy chief minister of Bihar as the Convenor.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)

New Delhi: The GST Council will hold its next meeting in Rajasthan’s Jaisalmer on December 21, during which it is likely to take a decision on exempting or lowering the GST rate on health and life insurance.

The council, chaired by Union Finance Minister Nirmala Sitharaman, may also take up the issue of rationalising GST rates on a number of goods consumed by the common man such as bottled drinking water and notebooks for students, to bring them under the 5 per cent slab from 12 per cent at present.

The GST Council has asked the Group of Ministers (GoM) to finalise the report on the GST rate on insurance by the October end. After the GoM meeting on health and life insurance, the council met last month and arrived at a broad consensus on exempting GST on insurance premiums paid for life insurance policies, and senior citizens’ health insurance.

GST on premiums paid by individuals, other than senior citizens, for health insurance of up to Rs 5 lakh, is proposed to be exempted. However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.

The GoM on GST rate rationalisation also has suggested that the council rework tax rates on goods such as packaged drinking water, bicycles, exercise notebooks, luxury wristwatches, and shoes.

The GoM on rate rationalisation proposed reducing GST on packaged drinking water of 20 litres and above to 5 per cent from 18 per cent. If the GoM’s recommendation is accepted by the GST council, GST on bicycles costing less than Rs 10,000 will be reduced to 5 per cent from 12 per cent while GST on notebooks used by students will be reduced to 5 per cent from 12 per cent.

The GoM also proposed increasing GST on shoes priced above Rs 15,000 from 18 per cent to 28 per cent. It also proposed raising GST on wristwatches costing above Rs 25,000 from 18 per cent to 28 per cent.

Currently, GST is a four-slab regime. Essential items are either exempted or taxed at 5 per cent while luxury goods face a 28 per cent levy. The 12 and 18 per cent slabs are positioned between the two.

Last Updated:November 15, 2024, 14:08 IST

GST Council Meet: Finance Minister Nirmala Sitharaman is slated to meet her state counterparts on December 21

Finance Minister Nirmala Sitharaman,

Finance Minister Nirmala Sitharaman is slated to meet her state counterparts on December 21 for the 55th GST Council meeting in Rajasthan’s Jaisalmer.

The Council was initially scheduled to meet in November. The delay is due to the Assembly elections in Maharashtra and Jharkhand, and then the Winter Session of Parliament.

During the meeting, state finance ministers will present their recommendations for the 2025-26 Budget to be tabled on February 1, 2025.

The Council is also likely to take up some rationalisation exercises and slash tax rates on a number of common items from 12 per cent to 5 per cent as per the recommendations of a panel of state ministers.

The rate rationalisation aims to raise taxes on luxury and sin goods and provide relief on essential items. The Group of Ministers on rate rationalisation, also headed by Choudhary, has Kerala Finance Minister KN Balagopal, Uttar Pradesh Finance Minister Suresh Kumar Khanna, Karnataka Revenue Minister Krishna Byre Gowda, West Bengal Finance Minister Chandrima Bhattacharya and Rajasthan Medical and Health Services Minister Gajendra Singh as members.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent. Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. The average GST rate has fallen below the revenue-neutral rate of 15.3 percent, prompting the need to start discussions on GST rate rationalisation.

The group of ministers (GoM) on health and life insurance GST, this October, broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens’ health insurance from GST.

In addition, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh has also been proposed for an exemption. An 18 per cent GST will, however, continue to be levied on premiums paid for policies with health insurance cover of over Rs 5 lakh.

Last Updated:November 12, 2024, 13:27 IST

The meeting assumes significance as states finance ministers would present their recommendations for 2025-26 Budget to be unveiled on February 1, 2025.

In the 55th GST Council meeting, the much-awaited decision on exemption or lower GST rate on health and life insurance would be taken.

Union Finance Minister Nirmala Sitharaman is likely to meet her state counterparts on December 21-22 for pre-budget consultations and meeting of the GST Council, an official said. The meeting assumes significance as states finance ministers would present their recommendations for 2025-26 Budget to be unveiled on February 1, 2025.

The 55th GST Council meeting would be held during one of these two days in which the much awaited decision on exemption or lower GST rate on health and life insurance would be taken.

The Council may also take up some rationalisation exercise and reduce tax rates on a host of common items from 12 per cent to 5 per cent as per the recommendations of a panel of state ministers.

The two-day meeting is slated to take place in Rajasthan, either in Jaisalmer or Jodhpur, the official added.

Last month, the group of ministers (GoM) on health and life insurance GST broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens’ health insurance from GST.

Also, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted. However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.

The GST Council in its 54th meeting on September 9 had tasked the GoM to finalise the report on GST levy on insurance by October-end.

Separately, the GoM on GST rate rationalisation has also suggested that the GST Council rejig tax rates on a host of goods, including packaged drinking water, bicycles, exercise notebooks, luxury wrist watches, and shoes. This rate rejig is expect to result in revenue gain of about Rs 22,000 crore.

The GoM on rate rationalisation proposed reducing GST on packaged drinking water of 20 litre and above to 5 per cent from 18 per cent. If the GoM’s recommendation is accepted by the GST Council, GST on bicycles costing less than Rs 10,000 will be reduced to 5 per cent from 12 per cent.

Also, GST on exercise notebooks will be reduced to 5 per cent from 12 per cent. The GoM also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent. It also proposed hiking GST on wrist watches costing above Rs 25,000 from 18 per cent to 28 per cent.

Bihar Deputy Chief Minister Samrat Chaudhary is the convenor of the 13- member GoM on health and life insurance and 6-member GoM on rate rationalisation.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28 per cent. Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28 per cent slab. The average GST rate has fallen below the revenue neutral rate of 15.3 per cent, prompting the need to start discussions on GST rate rationalisation.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)