GST Council set to meet today, talks on rate rationalisation to kick off

GST Council Meet: The Goods and Services Tax (GST) Council is expected to deliberate on a host of issues on Monday, including the taxation of insurance premiums and rate rationalisation

GST Council Meet Today: The 54th meeting of the Goods and Services Tax (GST) Council, scheduled for Monday, is set to discuss several critical issues that could significantly impact multiple sectors.

Chaired by Finance Minister Nirmala Sitharaman, the council will deliberate on the taxation of insurance premiums, rate rationalisation suggestions from the Group of Ministers (GoM), and the status of GST collections from online gaming, News18 reported.

Taxation on insurance premiums: A major focus

A key item on the agenda is the GST levied on life, health, and reinsurance premiums, with the fitment committee—comprising officials from the Centre and state tax authorities—expected to present its findings. One of the major points of discussion will be whether to reduce the current 18 per cent GST on health insurance or offer exemptions for specific groups, such as senior citizens, as a relief measure.

 

The council will also explore the possibility of lowering GST rates on life insurance premiums, addressing a long-standing concern raised by industry stakeholders. Shivashish Karnani, head of GST, DPNC Global, told News18 that India's insurance coverage remains among the lowest globally, exacerbated by the high tax burden on life and health insurance premiums.

"India, despite being the most populous country, ranks poorly in terms of insurance coverage. The 18 per cent GST on life and medical insurance premiums further aggravates affordability issues," Karnani said.

He further emphasised that a reduction in tax rates, or even a complete exemption from GST on insurance premiums, is one of the key expectations from this meeting.

Karnani also pointed out the potential challenges, such as input tax credit (ITC) reversals, but expressed hope for a rate reduction to as low as 5 per cent or 0.1 per cent, which would ease the burden on both insurers and policyholders.

The issue of GST on insurance premiums has been a subject of parliamentary debate, with opposition leaders pushing for exemptions. Union Transport Minister Nitin Gadkari has also urged Sitharaman to address the matter.

Online gaming taxation to be reviewed

The council is also expected to assess the impact of the recent decision to levy a 28 per cent GST on bets placed on online gaming platforms. Starting from October 1, 2023, online gaming companies have been required to pay this higher tax rate, irrespective of whether the game is based on skill or chance.

In its August 2023 meeting, the GST Council had clarified the imposition of this tax, which led to the amendment of Central GST laws to formalise the provision. Offshore gaming platforms have also been mandated to register with Indian GST authorities and pay taxes, failing which their websites would be blocked.

The meeting will review the revenue collected from this sector post-implementation of the new tax rate, but sources suggest that no changes to the 28 per cent tax rate are expected at this stage.

Crackdown on fake GST registrations

Another key topic likely to be discussed is the ongoing crackdown on fake GST registrations. A report on the success of the drive launched between August 16, 2024, and October 15, 2024, will be presented to the council. The initiative is aimed at identifying suspicious and fraudulent GST Identification Numbers (GSTINs), conducting verifications, and taking remedial action to eliminate fake billers.

In a similar drive conducted from May 16, 2023, to July 15, 2023, over 21,000 non-existent entities were identified, leading to the detection of suspected tax evasion amounting to Rs 24,010 crore. Of this, Rs 8,805 crore pertained to state tax jurisdiction, while Rs 15,205 crore was under the Centre's purview.

GST law amendments and amnesty scheme

The council will also give its approval to various notifications, including those related to the amnesty scheme announced during the previous meeting in June 2024. This scheme offers significant relief to taxpayers by waiving interest and penalties for demand notices issued in the first three years of GST implementation—FY18, FY19, and FY20—if the full tax due is paid by March 31, 2025.

Additionally, the council will discuss amendments to GST law aimed at reducing litigation. These include setting monetary limits for tax officers to file appeals before the GST Appellate Tribunal, High Court, and Supreme Court. The limits have been fixed at Rs 20 lakh, Rs 1 crore, and Rs 2 crore, respectively. The council also recommended lowering the quantum of pre-deposits required from taxpayers when filing GST appeals.

(With inputs from agencies)