Chaired by Union Finance Minister Nirmala Sitharaman, the council will also address other pressing issues, including a possible rationalisation of GST rates. This could lead to a reduction in tax rates on a range of common items from 12% to 5%, following recommendations from a panel of state ministers.
“The 55th meeting of the GST Council will be held on December 21, 2024, at Jaisalmer, Rajasthan,” the GST Council said in a post on X.
The 55th meeting of the GST Council will be held on 21 December, 2024 at Jaisalmer, Rajasthan
— GST Council (@GST_Council) November 18, 2024
The meeting is expected to bring clarity on several issues discussed in previous meetings. In its September 9 session, the GST Council tasked a group of ministers (GoM) to finalise recommendations on GST levies on health and life insurance by the end of October. Following that, the GoM on health and life insurance GST met and broadly agreed on exempting insurance premiums for term life policies and senior citizens’ health insurance.
Additionally, it is proposed that premiums paid by individuals for health insurance with coverage up to ₹5 lakh would be exempt from GST. However, a 18% GST would remain applicable to policies offering coverage above ₹5 lakh.
On GST rate rationalisation, the GoM has suggested revising tax rates on various goods. If accepted by the GST Council, several items will see a reduction in tax rates, including packaged drinking water (20 litres and above) from 18% to 5%, bicycles under ₹10,000 from 12% to 5%, and exercise notebooks from 12% to 5%.
However, luxury goods may see tax increases, with the GoM proposing to raise GST on shoes costing above ₹15,000 from 18% to 28%, and wristwatches priced over ₹25,000 from 18% to 28%.
These changes could potentially result in a revenue gain of around ₹22,000 crore.
Bihar Deputy Chief Minister Samrat Chaudhary leads the 13-member GoM on health and life insurance, while the GoM on rate rationalisation consists of 6 members.
Currently, the GST framework follows a four-tier structure, with slabs at 5%, 12%, 18%, and 28%. Essential goods are taxed at lower slabs, while luxury and non-essential items face higher tax rates, with an additional cess on luxury goods. The recent drop in the average GST rate, now below the revenue-neutral rate of 15.3%, has prompted calls for a thorough review and rationalisation of tax rates.
