Decision on higher rate of tobacco products expected in today’s GST Council meeting

Mumbai: Issues like GST relief on life and health insurance policy premiums, increase in GST rates on tobacco products, soft drinks and second-hand electric cars will be discussed and decided at the Goods and Services Tax (GST) Council meeting tomorrow. . ,

There has been a long standing demand to reduce or eliminate GST on insurance policy premiums. Council sources said that if this demand is met, the country’s exchequer is estimated to suffer a loss of Rs 2600 crore annually in the form of GST.

The council wants to compensate for the shortfall in revenue due to GST exemption on insurance policy premiums by increasing GST on other goods like tobacco products, soft drinks and second-hand electric vehicles. The 55th meeting of the GST Council is being held in Jaisalmer on 21 December.

According to the information received, in the council meeting, GST on old electric vehicles and small cars, which is currently 12 percent, will be increased to 18 percent.

Currently, 18 percent GST is levied on petrol cars above 1200 cc and diesel cars and SUVs above 1500 cc.

Sources also said that the Committee of Ministers, which recommends the GST rate, has recommended to the Council to increase the GST on cold drinks, cigarettes, tobacco and their products from the current 28 percent to 35 percent.