insurance
The GST Council on Saturday postponed the decision on reducing the tax rate on life and health insurance policy premiums. The officers provided this information. In the 55th meeting of the GST Council, it was decided that some more technical aspects need to be addressed in this regard. The matter was handed over to the GOM for further deliberations. The decision was taken by the council chaired by Union Finance Minister Nirmala Sitharaman and in the presence of her counterparts from the states. Bihar Deputy Chief Minister Samrat Choudhary said there will be another meeting of the GoM on insurance to decide on taxation on group, individual, senior citizen policies. Some members said more discussion was needed, Choudhary told reporters. We (GoM) will meet again in January.
Now we will have to wait till January
The council has constituted a Group of Ministers (GoM) on Insurance under the chairmanship of Chaudhary, which in its meeting in November had agreed to exempt the insurance premium of term life insurance policies from GST. Now we will have to wait till January for relief. It has also been proposed to exempt the premium paid by senior citizens for health insurance cover from tax. There is also a proposal to exempt from GST the premium paid for health insurance up to Rs 5 lakh for persons other than senior citizens. However, premiums paid for policies with health insurance cover above Rs 5 lakh will continue to attract 18 per cent GST.
Tax rate change postponed
The Group of Ministers (GoM) constituted on rationalization of GST rates on Saturday postponed submitting its report to the GST Council. Giving this information, Samrat Chaudhary, convener of the committee and Deputy Chief Minister of Bihar, said that the report had suggested rationalizing the rates of 148 items. “The report of the Group of Ministers (GoM) on rationalization of Goods and Services Tax (GST) rates will be submitted in the next meeting of the Council,” Chaudhary told reporters here. The Group of Ministers this month reached a broad consensus on rejigging tax rates on around 148 items, including imposing a higher tax on items like ‘harmful’ beverages and tobacco products at 35 per cent compared to the current 28 per cent. The Group of Ministers was widely expected to present its report at the GST Council meeting on Saturday. Currently, GST is a four-tier tax structure with slabs of five, 12, 18 and 28 percent. Luxury and perishable goods are taxed at the highest rate of 28 percent, while packaged foods and essential commodities are taxed at the lowest rate of five percent.
No change in tax rate on readymade clothes
The GoM had also decided to propose rationalization of tax rates on apparel. As per the decision, ready-made garments costing up to Rs 1,500 will attract five per cent GST, while garments costing between Rs 1,500 and Rs 10,000 will attract 18 per cent GST. Clothes costing more than Rs 10,000 will attract 28 per cent tax. Currently, clothes costing up to Rs 1,000 attract five per cent GST, while clothes costing more than that attract 12 per cent GST. The GoM also proposed increasing GST on shoes priced above Rs 15,000 per pair from 18 per cent to 28 per cent. It has also proposed to increase GST on wrist watches priced above Rs 25,000 from 18 per cent to 28 per cent.
The Group of Ministers had proposed reducing GST on packaged drinking water of 20 liters and above from 18 percent to five percent and reducing the tax rate on bicycles costing less than Rs 10,000 from 12 percent to five percent. Also, it was proposed to reduce GST on copies from 12 percent to five percent.
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