GST Council's 55th Meet: Key Tax Clarifications and Decisions Unveiled

In the 55th GST Council meeting, significant decisions were made on tax rates for various sectors. Key clarifications were offered on insurance premiums, electric vehicles, and fortified rice. Some issues were deferred, including the taxation of aviation fuel, health insurance, and disaster management funding, pending further analysis.

During the 55th meeting of the GST Council, significant decisions on tax clarifications were unveiled, though some key issues like tax rate determination and rate rationalization on goods, including insurance premiums, remained unresolved. Union Finance Minister Nirmala Sitharaman provided insights into these discussions during a press conference.

Notable decisions included reducing the compensation cess rate on supplies to merchant exporters to 0.1%. Sitharaman also announced a 5% GST rate on fortified rice kernels and highlighted exemptions for black pepper and raisins when supplied by farmers. It's been confirmed that ACC blocks containing 50% fly ash will attract a 12% GST rate.

Additional clarifications involved payment aggregators handling transactions under Rs 2,000, which will not attract GST, while payment gateways and fintech firms remain excluded. Exemptions were also confirmed for penal charges by banks and non-banking financial companies against borrowers for non-compliance. The Finance Minister announced an extension for the Group of Ministers working on the compensation cess issue, with no timeline set for reviews on the taxation of health insurance and disaster management funding.

(With inputs from agencies.)