GST Rate Rationalization Panel Meets Ahead of Crucial Council Meeting

Ahead of the significant GST council meeting on September 9th, the newly reconstituted Group of Ministers (GoM) on GST rate rationalization convened for the first time. Key discussions revolved around reducing GST rates on life and health insurance premiums, with requests from various members for rate reductions in several sectors.

Before the crucial Goods and Services Tax (GST) council meeting scheduled for September 9th, the reconstituted Group of Ministers (GoM) on GST rate rationalization met for the first time on Thursday. West Bengal Finance Minister Chandrima Bhattacharya has requested a reduction in GST rates of 18 percent on life and health insurance premiums.

Chandrima Bhattacharya confirmed, "I have placed the request of reducing GST on life and health insurance. I have been told that the fitment committee is looking into it." Karnataka Minister Krishna Byre Gowda added, "We have discussed the issue of relaxation in GST rates on insurance; we have asked for more data on it."

On the topic of rate rationalization or reducing the number of slabs under GST, Bhattacharya stated, "No member of the rate rationalization committee is in favour of changing or reducing the number of current slabs under GST." Krishna Byre Gowda echoed her sentiments, saying, "Why disturb something which is going on smoothly." However, sources indicated that no decisions have been made on reducing slabs or cutting GST rates on different items or insurance premiums.

Proposals have been made for reducing rates for insurance, hospitality, beverages, and the online gaming sector. The GoM for rate rationalization was reconstituted in June 2024 after new governments formed at the national and state levels. Bihar Deputy Chief Minister Samrat Chaudhary was appointed as the convenor of the GoM on GST rate rationalization, with other members including the finance ministers from Uttar Pradesh, Goa, Rajasthan, West Bengal, Karnataka, and Kerala.

The GST rate rationalization had been long pending before the committee, with expectations of decisions regarding the fitment of listed items under each GST slab. Particularly, commonly used products may transition from the 12% slab to the 5% slab.

In the last GST Council meeting on June 22, Finance Minister Nirmala Sitharaman announced significant measures, including Aadhaar biometric integration and exemptions in railway services.

(With inputs from agencies.)