Nirmala Sitharaman to begin pre-budget consultation with state FMs in December
New Delhi: Union finance minister Nirmala Sitharaman is likely to meet her state counterparts on December 21-22 for pre-budget consultations and the GST Council meeting is expected to be held during one of these two days in which the much awaited decision on exemption or lower GST rate on health and life insurance would be taken, a senior finance ministry official said on Tuesday.
The 55th GST Council meeting may also take up some rationalisation exercise and reduce tax rates on a host of common items from 12 per cent to 5 per cent as per the recommendations of a panel of state ministers. “The two-day meeting is slated to take place in Rajasthan, either in Jaisalmer or Jodhpur,” the official added.
Last month, the group of ministers (GoM) on health and life insurance GST broadly agreed on exempting insurance premiums paid for term life insurance policies, and senior citizens' health insurance from GST. Also, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted, however, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.
On September 9, the GST Council had tasked the GoM to finalise the report on GST levy on insurance by October-end. Separately, the GoM on GST rate rationalisation has also suggested that the GST Council rejig tax rates on a host of goods, including packaged drinking water, bicycles, exercise notebooks, luxury wristwatches, and shoes. This rate rejig is expected to result in revenue gain of about Rs 22,000 crore.
The GoM on rate rationalisation proposed reducing the GST on packaged drinking water of 20 litre and above to 5 per cent from 18 per cent. If the GoM’s recommendation is accepted by the GST Council, GST on bicycles costing less than Rs 10,000 will be reduced to 5 per cent from 12 percent.
Also, GST on exercise notebooks will be reduced to 5 per cent from 12 per cent. The GoM also proposed hiking GST on shoes above Rs 15,000/pair from 18 per cent to 28 per cent. It also proposed hiking GST on wristwatches costing above Rs 25,000 from 18 per cent to 28 per cent.
Meanwhile, earlier in the day, the finance minister also met Asian Infrastructure Investment Bank (AIIB) Board of Directors in the national capital here. The key purpose of the AIIB Board visit to India is to provide the board of directors a holistic insight into the AIIB’s ongoing and planned investments in its member countries and provide an opportunity to engage with the government, private sector, and other stakeholders.�
