ECONOMY
GST Council defers decision on tax on insurance premium, keeps ATF off GST net
- IBJ Bureau
- Dec 22, 2024
The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman in Jaisalmer, Rajasthan, concluded on Saturday with several key reforms. The council introduced some new taxation frameworks but deferred discussions on various long-due and anticipated matters, including the taxation of insurance policies.
Briefing media on the council’s key decisions, Ms Sitharaman informed that no decision was taken regarding GST rates on insurance premiums as the Group of Ministers (GoM) needed more time to study the issue. She also informed that inputs were awaited even from the Insurance Regulatory and Development Authority of India (IRDAI).
Furthermore, the council also recommended not to bring aviation turbine fuel (ATF) under the ambit of Goods and Services Tax (GST).
“States did not want the ATF because they saw it as a part of the crude petroleum diesel basket, and therefore they said that it alone cannot be taken out, and therefore that continues to remain where it is today,” Ms Sitharaman informed.
The GST Council recommended a reduction in the GST rate on fortified rice kernel (FRK) to 5 per cent. It has also recommended fully-exempt GST on gene therapy.
The finance minister said that the rate of Compensation Cess was reduced to 0.1 per cent on supplies to merchant exporters on a par with GST rate on such supplies.
Ms Sitharaman also clarified on the GST structure on used EV purchase and said that for used EV, individual selling to another individual will attract no tax but a company or a registered used car seller dealing with resale of EV or petrol or diesel will have to pay 18 per cent on margin value, which is the value between purchase price and re-sale value of that particular vehicle.
The council decided to postpone its agenda on revising tax rates for online food delivery platforms.
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