55th Meeting of the GST Council

1. In December 2024, the 55^th GST Council meeting, led by the Union Minister for Finance & Corporate Affairs, presented key recommendations.

1. These recommendations are regarding changes in GST tax rates, relief measures for individuals, trade facilitation, and improved compliance procedures.

Key Highlights

1. Delaying of GST Review on Insurance Premiums: The review of GST on life and health insurance premiums has been postponed.
2. Premiums on Health Insurance: GST exemption is proposed for health insurance premiums up to ₹5 lakh, except for senior citizens. Policies with coverage exceeding ₹5 lakh will continue to attract an 18% GST rate.
3. Postponement of Rate Rationalization Decisions: Decisions regarding GST rate adjustments for approximately 150 items were postponed which include items like garments, packaged drinking water, bicycles priced below ₹10,000.
4. Compensation Cess Regime: The compensation cess framework will end by March 2026. A ministerial panel, Group of Ministers (GoM), led by the Union Minister of State, has been tasked to determine the cess's future roadmap.
5. Exemptions Granted: GST exemptions were introduced for gene therapy and Long-range surface-to-air missiles (LRSAMs).
6. Increased GST Rates: GST on used car sales, including electric vehicles, was raised from 12% to 18%.
7. Natural Disaster Tax Levy Policy: A GoM will examine states' ability to impose levies during natural disasters. The Council supported Andhra Pradesh’s proposal for a uniform levy policy.
8. Agricultural Products: Clarifications were issued regarding GST on pepper and raisin supplies from farmers. Fresh/dried pepper and raisins supplied by agriculturists exempted from GST.
9. Popcorn GST Rates: 18% GST on sweetened or caramelized popcorn, 5% GST on salty and spicy popcorn (not pre-packaged or labeled), 12% GST on pre-packaged and labeled savory popcorn
10. GST on charges collected by municipalities for granting Floor Space Index (FSI) to builders was postponed. The Centre highlighted that these charges relate to municipalities and local authorities.
11. Decisions on Gift Vouchers: Gift vouchers were classified as non-taxable under GST. Penal charges by banks and NBFCs for violations of loan conditions were also exempted from GST.
12. Reduction of GST on Fortified Rice Kernels: GST on fortified rice kernels was reduced from 18% to 5%. This reduction aims to support Public Distribution System (PDS) programs, benefiting economically weaker sections.
13. Taxes on Food Delivery Platforms: GST for platforms like Swiggy and Zomato will be reduced to 5%, down from the current 18%.
14. Autoclaved Aerated Concrete (ACC) Blocks: Blocks with over 50% fly ash content will come under the bracket of 12% GST.
     

You Can Read Also: Kisan Diwas: Why Terms of Trade Have Improved More for Agricultural Labourers Than for Farmers

About Goods and Services Tax (GST)

1. Introduced in 2017 through the 101st Constitutional Amendment Act, 2016, GST is a unified indirect tax across India.
2. It is a destination-based tax levied on the consumption of goods and services, charged at each stage of production and distribution.

About GST Council

1. The GST Council is a constitutional authority established under Article 279A of the Indian Constitution.
2. Composition: The Council is a federal body led by the Union Finance Minister, who serves as its Chairman. Members include the Finance Ministers of all States.
3. Decision-Making Process: Decisions are made through a simple majority, requiring three-fourths of the weighted votes of members present.

1. The central government holds one-third of the total votes, while state governments collectively hold two-thirds of the voting power.

4. Objective: The Council serves as a joint platform for the Centre and States to address disputes and promote uniformity in GST implementation.

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