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GST News: In the 54th meeting of the National Goods and Services Tax Council held today, the decision to reduce the Goods and Services Tax on health insurance from 18 percent to 5 percent has been postponed till the next meeting. Currently, health insurance policyholders have to pay 18 percent GST on the premium amount.
Senior citizens and super senior citizens are avoiding taking health insurance as they have to pay a hefty premium and 18% GST for health insurance even though they have no source of income now. Thus, the hope of reducing GST on health insurance policy premium is on hold for now until a new solution is found.
The issue of GST on the premium charged on life insurance policies was also discussed. 18 per cent GST is levied on the premium of life insurance term plan i.e. term plan. Apart from this, savings plan is charged about 4.5 per cent in the first year and about Rs. 2.25 per cent GST. In such a situation, the burden of GST is also increasing significantly on those taking term insurance.
Sources who attended the GST Council meeting said that the impact of reduction in health insurance premium rates on the government's GST revenue was discussed. It was then decided not to take a final decision on this till the 55th meeting of the Council.
Members of the Fitment Committee also participated in this discussion. The Fitment Committee includes representatives of the central and state governments. In such a situation, crores of people who were expecting relief in GST on insurance premium have been disappointed. If the GST rate is reduced, it is likely that premium payers will get a lot of relief.
However, it is also known that the benefit of reduction in GST on premium is likely to be available only to senior citizens and super senior citizens. The government wants to wait a little before deciding whether to reduce the GST rate on health insurance premium or not. It was expected that the GST rate would be reduced from 18 percent to zero percent. The Fitment Committee is estimating the difference in government revenue if the GST on health insurance is reduced to zero percent.
GST will not be applicable on funds received for research in universities
– GST on motorcycle and car seats increased from 18% to 28%
GST will not be levied on funds given for research to universities established under central laws. This will accelerate research. Research will increase due to the abolition of GST. Also, it will be at par with global vendors.
GST on air conditioners called roof mounted package units purchased for railways has been increased to 28 percent. The 18 percent GST on motorcycles and car seats has been increased to 28 percent. After this, new tax rates will be implemented. GST on motor cars has also been increased to 28 percent.
It has been decided to issue e-challan only for business to consumer. Customs officers can easily verify the e-challan. After verifying the e-challan, it can also be refunded.
Other decisions taken in the GST Council
Five percent GST on helicopter service for religious places
New Delhi: Helicopter services for travelling to religious places will now attract 5% GST. The 18% GST on helicopter services used for those going to Kedarnath and Badrinath has been reduced to 5%.
GST on cancer medicines reduced from 12 to 5%
In today's meeting of the National Council of Goods and Services Tax, it has been decided to reduce the GST on cancer medicines from 12% to 5%. In this way, an attempt has been made to reduce the cost of cancer treatment.
18% GST to be levied on credit-debit card transactions
An additional fee of Rs 2000 will be charged on credit and debit card transactions for less than Rs 2000. GST will be levied at the rate of 18%. In such a situation, if the GST rate is increased slightly on consumers, there will be no delay. However, according to a report received late night, the Fitment Committee has been asked to discuss this issue and take a decision.
Cess collection will continue till March 2026
It has been decided to continue the collection of cess on GST till March 2026. A group of ministers will decide how to use this cess revenue. A decision will also be taken on whether this cess should be called compensation cess or not. The decision to continue the collection of cess has been taken only so that the loan amount taken to pay the GST money can be repaid to the states.
The issue of online transactions was also discussed
Goods and Services Tax was also discussed regarding the tax levied on online transactions of more than Rs 2000. Apart from tax on online transactions, many other issues were also discussed in today's GST Council meeting.
GST on Namkeen reduced from 18% to 12%
The GST rate on salt has been reduced from 18 per cent to 12 per cent. A reverse charge mechanism operates on metal scrap. If scrap metal is purchased from an unregistered supplier, the supplier will have to obtain registration once the turnover limit is crossed. Even if the supplier supplying goods to the buyer is below the threshold for obtaining GST registration, under the reverse charge mechanism the buyer of the goods will have to deposit GST in case the supplier has no turnover.
Transactions between related parties are not taxable
If the transaction between the related parties is through airlines, then the related party will not have to pay GST. GST will also be levied at the rate of 5% on helicopter services taken on sharing basis. GST will be levied on rent of commercial property through reverse charge mechanism.
The GST Council has decided to make e-invoicing voluntary on business-to-commerce transactions.