54th GST Council Meeting: Cancer Drugs, Insurance, Car Seats
The 54th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman and attended by state finance ministers and tax officials, concluded with several key recommendations.
Additionally, the GST rate on small digital transactions (PAs) is to be discussed at the next meeting. Additionally, the current 18 per cent GST rate on life and health insurance premiums has been referred to the fitment committee for a possible reduction.
Press Release of Recommendations By GST Council Members During the 54th Meeting
Updates from the 54th GST Council Meeting
“The proposal for the exemption of GST on life and health insurance was deferred. The matter is to be taken up again in the next meeting, with more data and analysis.”
“GST briefing timing is expected to be around 5 tentatively.”
“GST Council still deliberating on life insurance, health insurance, says Uttarakhand FM Premchand Aggarwal”
“GST on online transactions below Rs 2000 issue will be sent to thefitment committee for further deliberations”
“R&D to educational institutions has been made exempt from GST, says Uttarakhand FM”
“The GST Council in its next meeting may consider a proposal to impose an 18% Goods and Services Tax (GST) on payment aggregators (PAs) for facilitating small value digital transactions of upto Rs 2000 made via debit and credit card transactions.”
“Significant relief measures for the real estate sector and consumers are anticipated, which could address various issues currently affecting the industry.”
“The group of ministers, headed by Bihar Deputy Chief Minister Samrat Chaudhary, is working on consolidating the existing GST slabs of 5, 12, 18, and 28 percent into three tax rates. Finance Minister Nirmala Sitharaman mentioned that while the GST Council will discuss the rationalization of tax rates, a final decision on adjusting taxes and slabs will be made at a later stage.”
“A proposal to reduce GST on cancer drugs could provide relief to pharmaceutical companies such as Cipla and Abbott, making treatments more affordable.”
“A proposed GST hike on car seats from 18% to 28% could negatively impact the auto sector. Conversely, a reduction in GST for two-wheeler seats has been rejected, maintaining the 28% tax rate.”
“Relief from past GST claims for foreign airlines (₹10,500 crore) and institutions like IITs (₹220 crore) is on the table, potentially resolving long-standing disputes.”
A new mechanism may be approved by the GST Council, which could provide significant relief to the metal sector if members give the green light.
The council members are currently reviewing proposals to assist with electricity connections and additional charges.
“Indian Automotive Industry contributes 14-15% of total GST, says SIAM President: The Indian automotive industry has achieved a significant milestone, surpassing the ₹20 lakh crore mark in FY24 and now accounting for 14-15% of the total GST collected nationwide, said SIAM President Vinod Aggarwal on Monday. Speaking at the 64th annual ACMA session, Aggarwal highlighted the sector’s crucial role in both the economy and employment.”
“Council to discuss extension of Compensation Cess until FY26: The continuation of Compensation Cess until FY26 to cover a shortfall of ₹1.37 lakh crore is under discussion. This is a key topic for managing fiscal gaps and funding needs.”
New concerns have been raised about a revised proposal for sharing GST data due to potential risks to data privacy. The proposal, which had been turned down before, is now being reviewed again with extra precautions. If it’s given the green light, it could negatively impact businesses by exposing their private information.
The GST Council may consider changing taxes on savoury snacks and related products, which could help big companies like ITC and PepsiCo deal with tax issues they are currently facing.
“A proposal to levy 18% GST on “farm in, farm out” contracts in the oil and gas sector is under consideration. This would apply to sub-contracting and contract sales, potentially hitting the industry hard. The Petroleum Ministry is advocating against this measure.”
The members will examine the ongoing crackdown on fake GST registrations, The 54th Council will review how well the special campaign is going and what actions are being taken against people who break the rules.
The council might impose an 18% GST rate on small digital transactions up to INR 2K made using debit and credit cards through payment aggregators (PAs).
Source: www.cnbctv18.com and moneycontrol.com
What were the Expectations for the 54th GST Council meeting?
The 54th GST Council meeting is anticipated to be a pivotal event for the Indian economy. Besides the critical GST issues already mentioned, several other key areas are expected to be on the agenda.
GST on Health and Life Insurance: The GST Council may discuss a possible rate reduction on health and life insurance, as demanded by the people of India. This is a high-priority agenda item for both the opposition and Minister Nitin Gadkari.
Discussion on GST Notices: The 54th meeting may also discuss GST notices issued to Infosys and foreign airline companies.
GST Levy on Foreign Shipping Lines: The centre can ease the ‘related party transaction’ clause under the GST, for foreign shipping companies in India. Airlines and shipping companies may not have to pay GST when they bring in services from other countries. Instead, they would pay the tax when they use the services.
GST Rate Rationalisation: According to reliable sources, the council may develop a new plan to rationalize GST rates and present it to state ministers for approval.
Moreover, the meeting will focus on several critical issues, including technology-enabled solutions, anti-profiteering measures, and ITC.
Ribhu Sharma
I am Ribhu Sharma, a semi qualified chartered accountant and a commerce graduate from Kota university, Presently working with SAG Infotech Pvt.Ltd.Jaipur