The 54th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, began on Monday.
The Council is expected to deliberate on a range of issues, including the taxation of insurance premiums, the Group of Ministers’ (GoM) recommendations on rate rationalisation, and a status report on online gaming, according to PTI sources. The fitment committee, which includes central and state tax officials, is expected to present a report on the GST levied on life, health, and reinsurance premiums, along with the revenue implications.
Key Expectations from the GST Council Meeting:
1. Tax Reduction on Health Insurance: The Council will decide whether to reduce the current 18% GST on health insurance or provide exemptions for certain categories of individuals, such as senior citizens.
2. GST Cut on Life Insurance Premium: There will also be discussions on the possibility of reducing GST on life insurance premiums.
In the fiscal year 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health insurance premiums, while Rs 1,484.36 crore was collected on GST for health reinsurance premiums.
The issue of taxing insurance premiums has been raised in Parliament, with opposition members calling for health and life insurance premiums to be exempt from GST. In response, Finance Minister Nirmala Sitharaman noted that 75% of GST collections go to the states and suggested that opposition members bring their proposals to the GST Council through their state finance ministers.
West Bengal Finance Minister Chandrima Bhattacharya raised this issue in the GoM’s meeting on rate rationalisation last month, and the matter was referred to the fitment committee for further data analysis. The GoM had recommended against changing the current four-tier GST slab structure of 5%, 12%, 18%, and 28%, but asked the fitment committee to explore any potential for rate rationalisation on goods and services.
GST Expectations on Online Gaming:
Regarding online gaming, central and state tax officers will present a “status report” to the GST Council, which will include revenue collection data from the online gaming sector before and after October 1, 2023.
As of October 1, 2023, entry-level bets on online gaming platforms and casinos are subject to 28% GST. Prior to this, many online gaming companies argued that differential tax rates applied to games of skill and games of chance, resulting in non-payment of the full 28% GST. The GST Council clarified in its August 2023 meeting that online gaming platforms are required to pay 28% tax, and Central GST laws were amended to enforce this.
Additionally, offshore gaming platforms are required to register with GST authorities and pay taxes. If they fail to do so, the government has the authority to block their sites. The Council had agreed to review the taxation on the online gaming sector after six months of implementation.
PTI sources suggest that while the Council will discuss the status of taxation on the sector, any changes in tax rates are unlikely at this time.
