• Source:JND
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GST Council Meeting: In a respite for the common man, the Group of Ministers (GoM) on the GST Rate Rationalisation on Saturday postponed the submission of its report proposing to increase the GST rates on around 148 items, including clothes, watches, shoes and other sin goods including aerated beverages and tobacco products. Meanwhile, the GST Council also deferred the decision to reduce health and life insurance and said that the decision will now be taken in the next meeting.

The GoM panel's convenor on insurance and Bihar Deputy Chief Minister Samrat Chaudhary said one more meeting is required to take a call on taxation of group, individual and senior citizen's policies.

"Some (Council) members said more discussions required. We (GoM) will meet in January again," he said, adding, "Will submit the Group of Ministers (GoM) report on rate rationalisation in next meeting of the Council". 

The proposals on which the GST Council today deliberated include cutting taxes on food delivery platforms like Swiggy and Zomato, to 5 per cent (without input tax credit), from the current 18 per cent (with ITC). It also deliberated on bringing Aviation Turbine Fuel (ATF) into the Goods and Services Tax fold.

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The GoM on insurance had recommended exempting insurance premiums paid for term life insurance policies from GST. Also, premiums paid by senior citizens towards health insurance coverage have been proposed to be exempted from the tax.

Besides, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted. However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.

The GoM earlier this month proposed to increase GST on sin goods from the existing 28 per cent to 35 per cent. Sin Goods include aerated drinks, tobacco products, alcohol, cigarettes and gambling ventures among others. The government imposes Sin Tax on those items which are perceived harmful for the society and have bad effects on an individual's health.

The GoM also reached a broad consensus to rationalise GST rates on several items including apparel, shoes and wristwatches. As per the decision made by the GoM this month, ready-made garments costing up to Rs 1,500 would attract 5 per cent GST, while those between Rs 1,500 to Rs 10,000 would attract 18 per cent GST. Garments costing above Rs 10,000 would attract a 28 per cent tax. Currently, garments costing up to Rs 1,000 attract 5 per cent GST, while those above that attract 12 per cent.

Apart from ready-made garments, the GoM had also proposed hiking GST rates on high-end shoes. As per the proposal, the GST on shoes costing over Rs 15,000/pair is suggested to be hiked from the existing 18 per cent to 28 per cent. It also proposed raising GST on wristwatches above Rs 25,000 from 18 per cent to 28 per cent.

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Meanwhile, the GoM had also proposed to reduce the GST on packaged drinking water bottles of 20 litres and above to 5 per cent from the existing 18 per cent. Similar reductions have also been proposed on bicycles costing less than Rs 10,000 to 5 per cent, from 12 per cent. Also, GST on exercise notebooks should be reduced to 5 per cent from 12 per cent, the GoM proposed.