To rationalize GST rates the ministerial-level committee has been made that furnishes a relief before the consumers. It is anticipated that the GST rates on distinct medicines, insurance, and tractors shall be reduced to 5% in the next month.
At present there is a 12% or 28% GST on tractors as per their classification. The lessened revenue from tractors can be compensated via a rise in the GST rate on expensive electric vehicles (EVs).
On the health and term insurance, there might be a feasibility of GST rate reduction. From 18 to 12 percent the GST on health insurance can be lessened and the term insurance may attract a 5% GST.
For a certain time, the demand for zero GST on term insurance would surge which is directed to the loss of input tax credit for the insurance companies. Therefore it is perfect to consider the 5% GST proposal on term insurance.
The ministerial-level committee does not wish to revise the four rates of GST to three. The same may lessen the number of items that draw 12% GST. Some items can be put in a 5% slab, others can be moved to an 18% slab.
By the end of October, the committee will arrive with its suggestions. On October 19 a meeting will be conducted to discuss the GST rates on insurance. Another meeting will be scheduled on October 20 for the purpose of item-specific discussion on rate rationalization.
Numerous state finance ministers agreed to the three-slab structure, and states such as Kerala, Karnataka, and West Bengal are in favour of keeping the current rates.
Read Also: Revised GST Slab Rates in India by Council
As per the reports seeing the weak financial conditions of the states Kerala Finance Minister K N Balagopal is hesitating to diminish the GST rates.
