GST Council meet today: From insurance premium taxation, rate rationalisation, to online gaming report — What to expect

GST Council meet today: The Goods and Services Tax (GST) Council, led by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers and tax officials, is scheduled to meet today (September 9).

The GST Council is expected to discuss various topics, including the taxation of insurance premiums, suggestions on rate rationalisation from the Group of Ministers (GoM), and a status report on online gaming revenues, sources told PTI.

Further, the fitment committee is expected to present a report on GST levied on life, health and reinsurance premiums and the revenue implications, the sources added.

Here's What We Can Expect To Be On The Agenda

Taxation on Health Insurance, Life Insurance

GST Council will deliberate on whether to reduce the tax burden on health insurance from the current 18 per cent or exempt certain categories of individuals, such as senior citizens, PTI reported.

The deliberations will also happen with regard to a GST cut on life insurance premiums. Notably, the Centre and states mopped up ₹8,262.94 crore from GST on health insurance premiums and ₹1,484.36 crore from GST on health reinsurance premiums, it added.

This is a contentious issue that has been raised in the Parliament as well, with opposition leaders and fellow BJP leader and Union Transport Minister Nitin Gadkari demanding GST exemption on health and life insurance premiums.

In her reply during the Finance Bill discussion, Sitharaman stated that 75 per cent of insurance GST goes to states, and it is the state finance ministers who must bring the proposal to the Council.

Rate Rationalisation

West Bengal Finance Minister Chandrima Bhattacharya raised the issue of rate rationalisation during the August GoM meeting, the report said, and the matter was referred to the fitment committee for further data analysis.

Notably, the GoM has resisted changing the four-tier GST slab system: 5 per cent, 12 per cent, 18 per cent, and 28 per cent, but has directed the fitment committee to review the scope for rationalisation, the report said.

Online Gaming Revenue Report

Further, the GST Council will discuss the status report comparing the GST revenue collected through online gaming before and after October 1, 2023. Prior to that date, most online gaming companies did not pay GST and argued for differential tax rates for games of varied skills and chance, as per the report.

Since October last year, the government has imposed 28 per cent GST on entry-level bets placed on online gaming platforms and casinos. In its August 2023 meet, the GST Council recommended the tax levy, which was subsequently amended into the Central GST law to make the provision clear, the report said.

Also, offshore gaming platforms were directed to register with GST authorities and pay taxes, failing which the government would block those sites.

It was decided that the decision would be reviewed in six months. But sources told PTI that any change in taxes in the sector is "unlikely".

Drive Against Fake Registrations

Another issue on hand for the GST Council is a review of the success of the ongoing drive against fake registration and action taken against those found in violation, the report said. On this issue, the total suspected amount of GST evasion would also be presented before the Council.

The drive, launched on August 16 and set to last till October 15 this year, aims to detect suspicious and fake GSTINs, conduct requisite verification, and weed out these fake billers.

A similar drive was conducted between May 16 and July 15 last year, in which 21,791 entities with GST registration were found to be non-existent. The PTI report said these included 11,392 cases pertaining to state tax jurisdiction and 10,399 pertaining to CBIC jurisdiction.

A total of ₹24,010 crore of suspected tax evasion was detected — ₹8,805 crore from states and ₹15,205 crore from the Centre.

Other Notifications, Amendments

The GST Council is likely to approve notifications announced in the last meeting on June 22, including the amnesty scheme and various amendments to the GST law passed by Parliament through the Finance Act 2024 in August.

The 53rd meeting had recommended waiving interest and penalties for demand notices under the CGST Act, monetary limit of Rs. 20 lakh for GST Appellate Tribunal, Rs. 1 crore for High Court and Rs. 2 crore for Supreme Court, for filing of appeals by the Department, introducing 12 per cent GST on milk cans and carton boxes, among several other recommendations.

(With inputs from PTI)