The Goods and Services Tax (GST) Council, comprising Union Finance Minister Nirmala Sitharaman, state finance ministers, and tax officials, is scheduled to convene today, September 9. The meeting will focus on several critical issues, including the taxation of insurance premiums, suggestions for rate rationalization from the Group of Ministers (GoM), and an assessment of online gaming revenue collection.
A key discussion point will center around the potential reduction of the tax burden on health insurance, currently levied at 18%. The Council may consider exempting certain categories of individuals, such as senior citizens, from this tax. Similarly, discussions are expected regarding a potential GST cut on life insurance premiums. Notably, the government collected a substantial ₹8,262.94 crore from GST on health insurance premiums and ₹1,484.36 crore from health reinsurance premiums. This issue has sparked debate in Parliament, with opposition leaders and even Union Transport Minister Nitin Gadkari advocating for GST exemption on health and life insurance premiums. Finance Minister Sitharaman has responded by emphasizing that 75% of insurance GST revenue goes to states, and any proposal for changes should originate from the state finance ministers.
The Council will also review the GoM’s recommendations on rate rationalization. The GoM has resisted altering the existing four-tier GST slab system (5%, 12%, 18%, and 28%), but has directed the fitment committee to explore opportunities for rationalization.
Another prominent topic on the agenda is a status report on GST revenue collected from online gaming platforms before and after October 1, 2023. Prior to this date, most online gaming companies did not pay GST, advocating for differential tax rates based on skill and chance elements in games. In October 2023, the government implemented a 28% GST on entry-level bets placed on online gaming platforms and casinos. This decision, which was reviewed and clarified in the Central GST law, also mandated offshore gaming platforms to register with GST authorities and pay taxes, or face website blocking. While a review of this decision was scheduled in six months, sources indicate that a change in the tax structure is unlikely.
Furthermore, the GST Council will examine the progress of the ongoing drive against fake registrations and the actions taken against violators. The drive, launched on August 16 and set to continue until October 15, aims to identify suspicious and fraudulent GSTINs, conduct verification, and eliminate fake billers. The Council will be presented with the estimated amount of GST evasion detected during the drive. A similar campaign conducted last year between May 16 and July 15 uncovered 21,791 non-existent entities with GST registration, resulting in an estimated ₹24,010 crore in suspected tax evasion.
The Council is also expected to approve notifications announced at its previous meeting on June 22, including the amnesty scheme and various amendments to the GST law passed by Parliament through the Finance Act 2024. These amendments encompass measures like waiving interest and penalties for demand notices, setting monetary limits for appealing against GST rulings, and introducing a 12% GST on milk cans and carton boxes.
