The GST Council is set to discuss reducing the tax rate on health and life insurance premiums in its upcoming meeting in November. This issue was raised by Opposition parties during the last Parliament session.
Following the 54th GST Council meeting, Finance Minister Nirmala Sitharaman announced that a Group of Ministers (GoM) will be formed to examine the GST on insurance premiums. The GoM, led by Bihar Deputy Chief Minister Samrat Choudhary, has been tasked with submitting its report by the end of next month. The report will address concerns such as GST levied on insurance policies purchased by resident welfare associations. Once the report is submitted, the GST Council will make its decision.
Additionally, another GoM will focus on the future of cess collections from luxury and sin goods after March 31, 2026, when the current cess regime is set to expire.
In the recent meeting, the GST Council decided to reduce the tax on certain cancer medications, helicopter rides for pilgrimage, and namkeens. The GST on passenger transport via helicopters on a seat-share basis will be reduced to 5%, and past taxation will be regularized on an ‘as is where is’ basis. However, chartered helicopter services will continue to attract an 18% GST rate.
The GST rate on cancer drugs will be lowered from 12% to 5%, and on namkeens from 18% to 12%. The Council also discussed the GoM’s progress on rate rationalization and online gaming.
Since October 1, 2023, online gaming platforms and casinos have been subject to a 28% GST on entry-level bets. Previously, many platforms argued against the 28% tax due to differing rates for games of skill versus chance. In August 2023, the GST Council clarified that all online gaming platforms are liable to pay the 28% tax, and the Central GST law was subsequently amended. Offshore gaming platforms must also register with GST authorities or face website blocks. The Council will review the impact of the new online gaming tax after six months of implementation.