GST Council Meet: Rate Rationalisation And Health Insurance Decisions Pending; No Tax Change In Popcorn
No GST on penal charges levied or collected by banks, NBFCs from borrowers, said Nirmala Sitharaman.
The Goods and Services Tax Council took many decisions during its 55th meeting on Saturday. The meeting was chaired by Finance Minister Nirmala Sitharaman and comprised state counterparts.
Reduction of tax rate on fortified rice from 18% to 5%.
Gene therapy, critical for life saving measures, have been exempt from GST.
Decides to extend exemption of GST on systems, sub systems of Long Range Surface to Air Missile (LRSAM) and such software.
Extend 5% GST on food prepared intended for free distribution for economically weaker sections.
Black pepper and raisins supplied by agriculturist like farmers or plantation workers not liable to GST.
Clarification issued on Autoclaved Aerated Concrete blocks containing more than 50% fly ash which attract 5% GST.
Payment aggregators who do less than Rs 2,000 payment are eligible for GST exemption but this will not cover payment gateways and other fintech services.
Decision on taxing food delivery platforms over delivery charges deferred.
No GST on penal charges levied or collected by banks, NBFCs from borrowers.
GoM on compensation cess gets an extention to support their report.
Sitharaman said states not comfortable on bringing air traffic fuel under GST ambit citing it being in the basket of petroleum goods.
No GST on used EV sale when transaction by one individual to another.
But if a registered car seller deal with resale of used vehicle including EV will attract 18% GST on margin.
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The Group of Ministers has been given more time as requested on tax matter on health insurance, Sitharaman said. The panel wanted inputs from the Insurance Regulatory and Development Authority of India that is essential to form a view on GST insurance matter, she said.
The finance minister clarified that on popcorn if mixed with salt and spices, the GST of 5% applies if it is supplied loose or unpackaged, while 12% GST kicks in for pre-packaged and labeled popcorn. However, if it has added caramalised sugar, the rate will be 18%. This does not mean any new taxation.
Rate Rationalisation
A major item before the Council was the GST rate rationalisation panel's report, which has suggested rate tweaks in 148 items. Sitharaman said the Group of Ministers panel has requested more time which has been granted.
The GoM on GST rate rationalisation earlier this month decided to submit before the Council their recommendation to hike tax on sin goods, like aerated beverages, cigarettes, tobacco and related products, to 35% from the present 28%.
The minister said no set deadline has been given to the panel.
