The Analyse 55th GST Meet of the Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman, convened on December 21, 2024, in Jaisalmer. The Council deliberated on several key taxation issues, resulting in significant decisions affecting various sectors.
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Aviation Turbine Fuel (ATF):
The proposal to include ATF under the GST regime was rejected. Currently, state governments determine the taxation of ATF, leading to varying rates across the country. States expressed concerns over potential revenue losses, opting to keep ATF taxation under their jurisdiction.
Insurance Premiums:
Discussions on reducing GST rates for life and health insurance premiums were deferred. The Council acknowledged the need for further deliberation, with inputs from the Insurance Regulatory and Development Authority of India (IRDAI) pending. Consequently, the current GST rate of 18% on these premiums remains unchanged.
Food Delivery Services:
The Council considered lowering the GST on food delivery charges by e-commerce platforms from 18% to 5%. However, a decision was postponed, necessitating additional discussions. This comes in the wake of tax disputes involving major food delivery platforms.
Popcorn Taxation:
Clarifications were issued regarding GST rates on popcorn:
- Unpackaged popcorn with salt and spices: 5% GST
- Pre-packaged and labelled popcorn: 12% GST
- Caramel-coated popcorn: 18% GST
These rates align with existing taxes on similar snack items.
Used Vehicles:
The GST rate on the sale of old and used vehicles, including electric vehicles, sold by registered sellers, was increased from 12% to 18%. Direct sales between individuals remain exempt from GST.
Calamity Cess:
The Council agreed to form a Group of Ministers (GoM) to establish procedures for implementing a 1% calamity cess on certain goods and services. This measure aims to assist states in recovering from natural disasters.
Other Decisions: Analyse 55th GST Meet
- Fortified Rice Kernels: GST reduced from 18% to 5%, standardizing the rate regardless of end use.
- Autoclaved Aerated Concrete (AAC) Blocks: GST reduced from 18% to 12% for blocks containing more than 50% fly ash.
These decisions reflect the Council’s ongoing efforts to streamline GST rates and address sector-specific concerns. Stakeholders are advised to review these changes and assess their implications accordingly.
