Sun Dec 22 02:03:08 UTC 2024: **GST Council Postpones Key Decisions, Approves Some Rate Changes**

Jaisalmer, India (December 21, 2024) – The Goods and Services Tax (GST) Council concluded its 55th meeting in Jaisalmer today, postponing several key decisions while approving some rate changes. The much-anticipated review of GST levies on life and health insurance policies was deferred, with a Group of Ministers (GoM) tasked to further deliberate before making recommendations. Rate rationalization for approximately 150 items, including garments and packaged drinking water, was also postponed to the next meeting. A ministerial group will also have more time to propose a roadmap for the GST Compensation Cess, scheduled to expire in March 2026.

However, the Council did approve several changes. Gene therapy and long-range surface-to-air missiles (LRSAMs) were exempted from GST. The tax on used car sales, including electric vehicles, was increased to 18% from 12%. Clarifications were also provided on the taxation of pepper, raisins, and popcorn, with sweetened popcorn taxed at 18%, and salty/spicy varieties taxed at 5% (unlabeled) and 12% (labeled/pre-packaged). A proposal to levy GST on municipal charges for Floor Space Index (FSI) was deferred. The Council also clarified that gift vouchers and bank/NBFC penal charges are not subject to GST. Finally, the GST on fortified rice kernels supplied to the public distribution system (PDS) was reduced to 5% from 18%.

A new GoM will examine the tax implications for states affected by natural disasters, following a request from Andhra Pradesh. Union Finance Minister Nirmala Sitharaman chaired the meeting.

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