Major Tax Overhaul On The Cards: GST Council's Decisions Loom Large

The 55th GST Council meeting is underway, focusing on reducing tax rates on health and life insurance while considering rate changes on 148 items. Key proposals include tax exemptions on insurance premiums, an extension of GST compensation, and potential hikes on sin goods and certain luxury items.

The 55th GST Council meeting commenced on Saturday, with high anticipations regarding tax reductions on health and life insurance among other agenda items. Chaired by Union Finance Minister Nirmala Sitharaman, the council is poised for significant decisions involving rate realignments on 148 different items.

A critical focus involves resetting GST charges on health and life insurance. A committee led by Bihar Deputy Chief Minister Samrat Chaudhary suggests exemptions for term life insurance and extending benefits for senior citizens' health coverage. Proposals also include granting relief from GST on premiums for individual policies under Rs 5 lakh, while maintaining an 18 per cent charge for those exceeding this limit.

The meeting will also explore lowering food delivery service taxes and adjusting rates for used vehicles. Discussions on expanding the compensation cess's tenure and deliberating over substantial rate adjustments on 'sin goods' are also anticipated. The GST Council seeks to alleviate financial pressures while aligning with national fiscal goals.

(With inputs from agencies.)