The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, is set for December 21, 2024, in Jaisalmer, Rajasthan. This much-anticipated meeting will focus on several pivotal changes, particularly around health and life insurance policies and the rationalization of GST rates on essential and luxury goods.
Key Agenda Highlights:
1. GST Exemption on Health and Life Insurance
The Council is expected to decide on exempting or reducing GST rates on:
- Term Life Insurance: Likely to be fully exempt.
- Senior Citizens’ Health Insurance: Proposed exemption.
- Health Insurance Premiums (Up to ₹5 Lakh): Suggested exemption for individuals, excluding senior citizens. However, premiums for policies above ₹5 lakh will continue to attract 18% GST.
2. GST Rate Rationalization:
The GoM on rate rationalization has recommended reducing GST on several common items:
- Packaged Drinking Water (20L+): From 18% to 5%.
- Bicycles (Below ₹10,000): From 12% to 5%.
- Exercise Notebooks: From 12% to 5%.
3. Proposed GST Hikes on Luxury Goods:
- Shoes (Above ₹15,000): Increase from 18% to 28%.
- Wrist Watches (Above ₹25,000): Increase from 18% to 28%.
Expected Impact:
These changes aim to ease the tax burden on essential goods while increasing revenue from luxury items. The rate adjustments could lead to a revenue gain of approximately ₹22,000 crore.
The 55th GST Council meeting’s decisions could significantly impact consumers, particularly regarding insurance affordability and everyday goods. With the focus on balancing revenue neutrality and consumer relief, all eyes are on Jaisalmer this December.
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