GST Council meet tomorrow; rate rationalisation, taxation of insurance premium in focus
The GST Council is set to convene on Monday to address several key issues, including the taxation of insurance premiums, the Group of Ministers’ (GoM) recommendations on rate rationalisation, and an update on online gaming taxation.
Insurance premium taxation
The Council will examine a report from the fitment committee on the GST imposed on life, health, and reinsurance premiums. The discussion will focus on whether to reduce the current 18% tax rate on health insurance or to provide exemptions for certain groups, such as senior citizens. In the fiscal year 2023-24, the GST collections on health insurance premiums amounted to Rs 8,262.94 crore, while health reinsurance premiums generated Rs 1,484.36 crore.
The issue has garnered attention in Parliament, with opposition members advocating for GST exemptions on health and life insurance premiums. Transport Minister Nitin Gadkari has also addressed the Finance Minister on this topic. Finance Minister Nirmala Sitharaman responded by noting that 75% of GST revenue goes to states and suggested that state finance ministers bring proposals to the GST Council.
Online gaming taxation
The Council will review a status report on GST revenue from online gaming, focusing on the impact of the 28% tax rate implemented on October 1, 2023. Prior to this, many online gaming companies were not adhering to the 28% GST, citing discrepancies between tax rates for games of skill and games of chance. The GST Council clarified the requirement for a 28% tax and mandated registration for offshore gaming platforms.
Ongoing drive against fake registrations
The Council will also be updated on the drive against fake GST registrations, which runs from August 16 to October 15, 2024. This initiative aims to identify and address suspicious or fake GSTINs. The previous drive uncovered 21,791 non-existent entities and detected Rs 24,010 crore in suspected tax evasion.
Amendments and Notifications
The Council is expected to approve several notifications, including those related to the amnesty scheme announced in the last meeting. This scheme offers waivers on interest and penalties for demand notices issued in the initial years of GST, provided the full tax is paid by March 31, 2025. Other measures include setting monetary limits for tax appeals and reducing pre-deposit requirements for filing appeals.
The meeting will be chaired by Finance Minister Nirmala Sitharaman and will include state finance ministers.