The 55th GST Council meeting in Jaisalmer on December 21 and chaired by FM Nirmala Sitharaman took a few important decisions such as raising tax rates on used cars ICE as well as EV – from 12% to 18%, reducing tax rates on fortified rice kernels from 18% to 5%, no matter whatever the end use. According to reports, the GST Kashmiri shawls was raised to the highest bracket of 28%.
Though earlier in the day the word spread that the GST council decided to raise tax 18% if popcorn depending upon whether it is packaged and labelled and on whether it is mixed with sugar, the Council later clarified that there was no change in the tax rate on popcorn and the Central Board of Indirect Taxes and Customs (CBIC) will come out with a circular stating the tax structure on popcorn.
Decision on trimming tax on insurance premium deferred
The GST Council also kept in abeyance any decision on reducing tax on health insurance premium though it was widely expected. “The report of the council was to be given, and several people had their opinions on it. After another meeting, whether it should be group insurance, individual insurance, senior citizens’ insurance, or insurance for the disabled, a detailed report will be prepared for the next meeting,” said Samrat Chaudhary, deputy CM of Bihar, who is the head of the Group of Ministers on GST.
The GST Council meeting also did not arrive at a decision on reducing the GST rate on the food delivery service by platforms such as Swiggy and Zomato from the current rate of 18% (with input tax credit) to a proposed 5% (without input tax credit).
Report of rate rejig, ‘sin’ items for a later date
Another important development of the day was head of the GoM Samrat Chaudhary informing the media that their report on GST modification on as many as 148 items was not taken up at the council’s meeting. It was expected this report will be placed at the Council on Saturday. According to reports, one of the significant steps contained in this proposal is levying 35% tax on sin items such as cigarettes and related tobacco products, aerated water. These attract 28% GST currently.
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