Sat Dec 21 21:03:59 UTC 2024: **GST Council Postpones Key Decisions, Approves 5% GST on New EVs**

NEW DELHI – The 55th Goods and Services Tax (GST) Council meeting concluded on Saturday with several key decisions postponed, including a reduction in GST on insurance premiums and the taxation of food deliveries. While a 5% GST on new electric vehicles (EVs) was approved to boost adoption, further deliberation is needed on several other crucial issues.

Finance Minister Nirmala Sitharaman announced that the council will not be reducing the GST on health and life insurance premiums at this time, citing disagreements among members. A Group of Ministers (GoM) will further examine the matter, taking into consideration inputs from the Insurance Regulatory and Development Authority of India (IRDAI). Similarly, a decision on the taxation of food deliveries provided by e-commerce operators remains deferred, pending review by the fitment committee.

The council did agree to establish a separate GoM to explore the implementation of a 1% calamity cess on specific goods and services to aid states in recovering from natural disasters. However, differences among states regarding the scope of the cess – whether to cover all state-level disasters or specific events – necessitates further discussion. This GoM will include representatives from Uttar Pradesh, Andhra Pradesh, West Bengal, and other states.

Other key decisions included:

* **Used EVs:** A 18% GST will be levied on used EVs sold by businesses, including the margin between purchase and selling price. Used EVs sold between individuals will remain GST-free.
* **Gene therapy:** Exempted from GST.
* **Surface-to-air missiles:** IGST exemption extended.
* **Floor Space Index (FSI):** No decision reached on tax implications.
* **Aviation Turbine Fuel (ATF):** No change in taxation, and no GoM will be appointed.
* **Penal charges by banks and NBFCs:** No GST payable.
* **Payment aggregators:** Exemptions for those processing less than ₹2000 in payments.
* **Black pepper and raisins (supplied by agriculturists):** GST not applicable.
* **ACC blocks with 50% fly ash:** 12% GST.
* **Compensation cess:** Reduction for merchant exporters; extension for the GoM.
* **Fortified rice kernels:** GST rate reduced to 5%.

Industry experts expressed concerns about the need for clarity on various issues, particularly regarding the retrospective application of GST on food deliveries. State finance ministers also highlighted the importance of cooperative federalism and the need for clarity on fuel taxation. The Finance Minister urged against speculation until further announcements are made. Further updates will be posted on CNBCTV18.com.

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