Centre recommends reducing GST on packaged water and bicycles below Rs 10,000

Term life insurance coverage policies, and elderly people’ medical insurance premium are most likely to be excused from GST as many members of a state ministerial panel favoured cutting taxes to benefit the commoner, an authorities stated on Saturday.

The Group of Ministers (GoM) to select GST on health and life insurance coverage premiums in its conference on Saturday chose to exempt GST on premiums paid by people, aside from elderly people, for medical insurance with protection of approximately Rs 5 lakh. 18 per cent GST will continue to be imposed for health insurance coverage cover of over Rs 5 lakh.

Independently, the GoM on GST rate rationalisation, too, fulfilled on Saturday and recommended that the GST Council rejig tax rates on a host of products, consisting of packaged drinking water, bikes, workout note pads, high-end wrist watches, and shoes.

A decision on GST on health and life insurance coverage premiums, along with rate rationalisation, is most likely to the taken by the GST Council, chaired by Union Finance Minister and consisting of state equivalents, in its conference set up to happen next month.

“The rate rejig workout will assist the states and Centre to understand earnings gain of Rs 22,000 crore, which will assist cover the income loss from decrease in GST rates for insurance coverage premiums,” the authorities included.

The GoM on rate rationalisation proposed decreasing GST on packaged drinking water of 20 litre and above to 5 percent from 18 percent. If the GoM’s suggestion is accepted by the GST council, GST on bikes costing less than Rs 10,000 will be lowered to 5 percent from 12 percent.

GST on workout note pads will be decreased to 5 per cent from 12 per cent. The GoM likewise proposed treking GST on shoes above Rs 15,000/ set from 18 percent to 28 percent. It likewise proposed treking GST on wrist watches above Rs 25,000 from 18 percent to 28 percent.

Speaking to press reporters after the GoM conferences, Bihar Deputy Chief Minister Samrat Chaudhary, who is the convenor of the health and life insurance coverage GoM, stated “every GoM member wishes to offer relief to individuals. Unique focus will be on seniors. We will send a report to the Council. A decision will be taken by the Council”.

Chaudhary, who is likewise a convenor of the GoM on rate rationalisation, stated the panel will reunite before sending its report to the Council. This was the very first conference of the 13-member GoM health and life insurance coverage premiums, which was established to last month to recommend tax rates.

The panel, that includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana, has actually been mandated to send its report to the GST Council by October- end.

In 2023-24, the Centre and states gathered Rs 8,262.94 crore through GST on medical insurance premium, while Rs 1,484.36 crore was gathered on account of GST on health reinsurance premium.

The six-member Group of Ministers (GoM) on GST rate rationalisation consists of Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda, West Bengal Finance Minister Chandrima Bhattacharya, and Kerala Finance Minister K N Balagopal.

To make great the earnings loss that will be sustained on account of reducing the tax rate on items utilized by the commoner, the GoM likewise talked about the possibility of raising tax rates on some products, consisting of oxygenated water and drinks.

Presently, GST is a four-tier tax structure with pieces at 5, 12, 18, and 28 percent.

Under GST, important products are either excused or taxed at the most affordable piece, while high-end and demerit products bring in the greatest piece. High-end and sin items bring in cess on top of the greatest 28 percent piece.

The typical GST rate has actually fallen listed below the earnings neutral rate of 15.3 percent, triggering the requirement to begin conversations on GST rate rationalisation.