55th GST Council meet: All eyes on health insurance premiums, ATF, `Sin Tax`
As the 55th meeting of the GST Council was set to begin in Jaisalmer on Saturday, chaired by Union Finance Minister Nirmala Sitharaman, the proposed rate cut on health insurance premiums and the inclusion of Aviation Turbine Fuel (ATF) under the GST ambit would be among the key focus areas.
The GST Council is also set to deliberate on revising the rates of nearly 150 items during the meeting which is likely to help the Centre generate additional revenue of nearly Rs 22,000 crore.
A significant agenda for the GST Council is the proposed rate cut on term health and life insurance premiums. The GST exemption/reduction on life and health insurance is a long-pending demand of the industry, as the move would alleviate the tax burden on both insurers and policyholders.
While most of the panel members of the Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, pitched for "full exemption" on health and life policy premiums, a few panel members suggested reducing the rate to 5 per cent from the current 18 per cent.
Additionally, insurance policies offering coverage of up to Rs 5 lakh may also receive GST relief.
Another key agenda is to decide whether the 5 per cent GST on delivery charges by food delivery platforms will be applied retrospectively from 2022. Currently, food delivery companies do not pay GST on delivery charges.
Also, the GST Council is likely to take up the issue of bringing aviation turbine fuel under the GST ambit.
At present, the central excise duty of 11 per cent is levied on ATF. It also has a concession of 2 percent under the Regional Connectivity Scheme.
Moreover, there is a recent proposal from the GoM to introduce a 'Sin Tax' on demerit goods such as tobacco and aerated drinks. Currently, there is no specific 'sin goods' category under the GST structure.
The creation of such a category would send a strong message that India prioritises the well-being of its people over the profits of industries that thrive on unhealthy habits, according to industry experts.
Additionally, a new slab of 35 per cent is likely to be introduced targeting sin goods.
