NEW DELHI — The GST Council will take a call on reducing tax rate on premiums of health and life insurance policies at its next meeting in November, an issue which was raised by Opposition parties in the last Parliament session.
Briefing reporters on decisions taken in the 54th meeting of the GST Council held on Monday, Union Finance Minister Nirmala Sitharaman said a Group of Ministers will be constituted to look into the GST on premiums of life and health insurance policies.
While there appears to be a wide consensus among the states on reducing 18 per cent tax levied on health and life insurance policies, the Group of Ministers to be headed by Bihar Deputy Chief Minister Samrat Choudhary has been asked to submit its report by the end of next month on issues such as levy of GST on policies bought by resident welfare associations.
The all-powerful GST Council will take a decision on the issue post-submission of the GoM report, Sitharaman said.
The minister said a separate GoM will look into treatment of collections from a cess levied on luxury and sin goods post its sunset date of March 31, 2026.
Also read: Broad consensus in GST Council to cut taxes on insurance premiums, decision in next meet: Sources
She said the Council in its meeting decided to cut GST on certain cancer drugs, helicopter rides for pilgrimage to Kedarnath and namkeens.
The Council decided to bring down GST to 5 per cent on the transport of passengers by helicopters on seat share basis and to regularize the GST for past period on ‘as is where is’ basis.
It also clarified that the charter of helicopters will continue to attract 18 per cent GST.
The GST rate on cancer drugs will be reduced from 12 per cent to 5 per cent while on some namkeens to 12 per cent from 18 per cent.
During the meeting, the Council decided to cut the tax rate on cancer drugs to 5 per cent from 12 per cent and namkeen from 18 per cent to 12 per cent.
The Council also deliberated on the GoM's status report on rate rationalisation and online gaming.
From October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28 per cent GST. Prior to that, many online gaming companies were not paying 28 per cent GST arguing that there were differential tax rates for games of skill and games of chance.
The GST Council in its meeting in August 2023 had clarified that online gaming platforms were required to pay 28 per cent tax and subsequently Central GST law was amended to make the taxation provision clear. Offshore gaming platforms were also mandated to register with GST authorities and pay taxes, failing which the government would block those sites.
The Council had then decided that the taxation on the online gaming sector would be reviewed after six months of its implementation.