FM Sitharaman also announced a committee of secretaries for ministers who wish to understand the issue of levy of Integrated GST.
GST Council Meeting: Key Decisions and Announcements
The GST Council, India’s apex decision-making body for the Goods and Services Tax (GST), held its 54th meeting on September 9th, 2024. The meeting, chaired by Finance Minister Nirmala Sitharaman, saw several crucial decisions and announcements impacting various sectors of the Indian economy.
Health and Life Insurance
New GoM: The Council formed a new Group of Ministers (GoM) to examine the possibility of reducing GST rates on medical and life insurance premiums.
Report Submission: The GoM will submit its recommendations by the end of October 2024.
Key Areas of Focus: The GoM will delve into insurance matters for senior citizens, life insurance, term life insurance, group insurance, and more.
GST Exemption: West Bengal Finance Minister Chandrima Bhattacharya advocated for a full GST exemption on health insurance, which was supported by several other states.GST Rate Changes
Cancer Drugs: The Council decided to reduce the GST rate on cancer drugs from 12% to 5%, providing relief to patients undergoing treatment.
Namkeens: The GST rate on namkeens was lowered from 18% to 12%.
Car and Motorcycle Seats: The GST rate on car and motorcycle seats was increased from 18% to 28%.Compensation Cess
GoM Formation: A GoM will be formed to determine the future course of the compensation cess beyond March 2026.
Decision Making: The GoM will decide on the additional Rs 40,000 crore collected after adjusting for loans and interest.
Compensation Period: The compensation cess is expected to settle the loan and cess amounts by January 2026, with collections continuing until March 2026.
Beyond March 2026: If the cess is to be collected beyond March 2026, it can no longer be termed a "Compensation cess." The GoM will decide on its purpose and usage.Other Key Decisions
Online Gaming and Casinos: The Council noted the significant revenue growth from online gaming (412%) and casinos (30%).
GST Exemption: Imports of services through related party transactions by airlines will be exempt from GST.
RCM on Metal Scrap: A Reverse Charge Mechanism (RCM) will be introduced on metal scrap, applicable up to a certain threshold.
B2C E-Invoicing: Voluntary B2C e-invoicing will be introduced in selected states on a pilot basis.
IGST Committee: A committee will be established to address the IGST deficit and update the IGST formula.
Retrospective Tax Demands: Section 11A will be used in rare cases to address retrospective tax demands.
RCM on Commercial Property: Renting of commercial property by unregistered persons to registered persons will be brought under RCM.
Invoice Management System: An invoice management system will be implemented to address input tax credit mismatches.These decisions and announcements highlight the GST Council’s ongoing efforts to streamline the GST regime, provide relief to various sectors, and ensure a fair and efficient tax system in India.