Key GST Council decisions and finance updates

Jaisalmer

During the 55th GST Council meeting in Jaisalmer on Saturday, chaired by Union Finance Minister Nirmala Sitharaman, several significant decisions were discussed. The Council deferred a decision on the proposed reduction of the Goods and Services Tax (GST) rate on life and health insurance premiums. Despite calls from the Group of Ministers (GoM) for a full exemption or a reduction to 5%, more discussions are needed to finalize the rate changes. The Council will reconvene in January to resolve these issues.

One major agenda item was the proposal to include aviation turbine fuel (ATF) under GST, along with the potential introduction of a "Sin Tax" targeting harmful products like tobacco and sugary drinks. A new 35% tax slab for these products is under consideration, with the aim of promoting public health over industry profits. The Council also clarified tax rates on ready-to-eat popcorn, with variations based on ingredients and packaging.

Meanwhile, Sitharaman addressed the impressive devolution of funds to states under the 15th Finance Commission. She revealed that in just 45 months, the 15th Commission had transferred more funds to states than the 14th Commission did over 60 months. This commitment is part of the government's broader agenda to support state-level development, as confirmed during her pre-budget consultation in Rajasthan.

The GST Council also reviewed tax rates on AAC blocks, used cars, and food delivery platforms, signaling a broader effort to rationalize the tax structure. These discussions are set to continue, with the government seeking to balance the needs of both taxpayers and economic growth.