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In the marathon meeting of the GST Council on Monday, the Council failed to take a decision on reduction of GST on health and life insurance premium. Thus, once again the GST Council is confused on this issue.
According to reports, almost all the states agree on the issue of reducing GST on health and life insurance premiums, but some states want to keep the GST on it at five percent while others are in favor of abolishing GST. After this, it has been decided to send the issue to the Group of Ministers (GoM) for consideration. It is worth noting that Union Minister Nitin Gadkari had written a letter to Finance Minister Nirmala Sitharaman demanding withdrawal of 18 percent GST on life insurance and medical insurance premiums, saying that it is like taxing the uncertainty of life.
The growth of the sector will be adversely affected. However, on Monday, the decision to cut the GST rate on insurance premium to 18 per cent has been deferred and the matter has now been sent to the Fitment Committee.
Matter of transactions worth less than Rs. 2000 also referred to GoM: Another important issue in Monday's council meeting has also been referred to the Fitment Committee. According to reports, the 54th GST Council meeting is yet to decide on imposing 18% GST on small online transactions. In this meeting, taxation of payment aggregators on income from transactions worth less than Rs. 2000 was discussed but no decision could be taken, as a result of which the issue has been referred to the Fitment Committee.
Fitment Committee in favour of levying GST on transactions: The Fitment Committee will send a report to the Council after giving a thorough consideration to the issue. It is worth noting here that the Fitment Panel is in favour of levying GST on such transactions. It may be mentioned here that currently payment aggregators charge a fee of Rs. Since 2000, low-cost digital transactions have been exempted from GST.
GST on helicopter travel reduced
Uttarakhand government's Finance Minister Prem Chand Aggarwal said that the 18 percent GST duty on helicopter services for carrying pilgrims to four holy places like Kedarnath and Badrinath should be reduced to five percent. This proposal has been approved in the GST Council meeting on Monday. Aggarwal told the media that the journey to Char Dham will now be cheaper as the GST rate on helicopter services has been reduced from 18 percent to five percent. He said that earlier there was no clarity about this but now there will be clarity.
Some other important decisions of the GST Council
The GST rate on cancer medicines has been reduced from 12 per cent to 5 per cent.
GST rate on namkeen and salty food reduced from 18% to 12%
The Council has recommended exemption from GSTMA for research and development supplies provided by government entities.