The Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman and including state finance ministers and tax officials, is set to convene today (September 9).
The Council is anticipated to deliberate on several issues, such as the taxation of insurance premiums, recommendations on rate rationalisation from the Group of Ministers (GoM), and a status report on online gaming revenues, according to sources from PTI.
Additionally, the fitment committee is expected to present a report on the GST applied to life, health, and reinsurance premiums, along with the revenue implications, the sources noted.
Taxation on Health Insurance and Life Insurance
The GST Council is set to discuss the possibility of reducing the tax burden on health insurance from the current 18 percent or exempting certain categories of individuals, such as senior citizens, according to a PTI report.
The Council will also consider a GST reduction on life insurance premiums. Notably, the Centre and states collected ₹8,262.94 crore from GST on health insurance premiums and ₹1,484.36 crore from GST on health reinsurance premiums, the report added.
This issue has been contentious and raised in Parliament, with opposition leaders and Union Transport Minister Nitin Gadkari, a fellow BJP leader, demanding GST exemption on health and life insurance premiums.
In her response during the Finance Bill discussion, Finance Minister Nirmala Sitharaman noted that 75 percent of insurance GST revenue goes to the states, and it is up to the state finance ministers to bring the proposal to the Council.
Rate Rationalisation
During the August Group of Ministers (GoM) meeting, West Bengal Finance Minister Chandrima Bhattacharya brought up the issue of rate rationalisation, according to the report. The matter was subsequently referred to the fitment committee for further data analysis.
Notably, the Group of Ministers (GoM) has resisted altering the existing four-tier GST slab system of 5 percent, 12 percent, 18 percent, and 28 percent. However, they have instructed the fitment committee to review the potential for rationalisation, the report stated.
Online Gaming Revenue Report
Additionally, the GST Council will review a status report comparing the GST revenue collected from online gaming before and after October 1, 2023. Before this date, many online gaming companies did not pay GST and argued for differential tax rates based on the skill and chance involved in the games, according to the report.
Since October last year, the government has imposed a 28 percent GST on entry-level bets placed on online gaming platforms and casinos. In its August 2023 meeting, the GST Council recommended this tax levy, which was subsequently incorporated into the Central GST law to clarify the provision, the report noted.
Also, offshore gaming platforms were directed to register with GST authorities and pay taxes, failing which the government would block those sites.
It was decided that the decision would be reviewed in six months. But sources told PTI that any change in taxes in the sector is “unlikely”.
Drive Against Fake Registrations
Another key issue for the GST Council is to review the progress of the ongoing drive against fake registrations and the actions taken against violators, according to the report. The total suspected amount of GST evasion will also be presented to the Council.
Launched on August 16 and running until October 15 this year, the drive aims to identify suspicious and fake GSTINs, conduct necessary verifications, and eliminate these fraudulent billers.
A similar initiative was conducted between May 16 and July 15 last year, uncovering 21,791 entities with non-existent GST registrations. These included 11,392 cases under state tax jurisdiction and 10,399 under CBIC jurisdiction.
The drive detected a total of ₹24,010 crore in suspected tax evasion—₹8,805 crore from states and ₹15,205 crore from the Centre, the PTI report stated.
Other Notifications and Amendments
The GST Council is expected to approve notifications announced during the last meeting on June 22, including the amnesty scheme and various amendments to the GST law passed by Parliament through the Finance Act 2024 in August.
The 53rd meeting had recommended waiving interest and penalties for demand notices under the CGST Act, setting a monetary limit of ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for the High Court, and ₹2 crore for the Supreme Court for filing appeals by the Department. Additionally, the Council recommended introducing a 12 percent GST on milk cans and carton boxes, among several other recommendations.