The 54th Goods and Services Tax (GST) Council meeting took place on Monday, chaired by Union Finance Minister Nirmala Sitharaman in Delhi. Several important decisions were made:
Review of Merchant Fees: The GST Council has decided to refer the issue of imposing 18% GST on merchant fees for transactions below ₹2,000 to the Fitment Committee.
Currently, payment aggregators are not required to pay GST on these smaller transactions.
Reduction in GST on Pilgrimage Services: The Finance Minister of Uttarakhand announced that GST on helicopter services for religious pilgrimages, such as trips to Kedarnath and Badrinath, has been reduced from 18% to 5%.
Postponed Decision on Insurance Premiums: The Council has postponed the decision on imposing GST on insurance premiums.
This topic will be discussed in the next meeting. A group of ministers has been formed to review the GST rate on health insurance policies in detail.
Update on Insurance Premiums and GST Collection
Health and Life Insurance Premiums: The GST Council is generally in favor of reducing the GST rate on health and life insurance premiums from the current 18%.
The specifics of this reduction will be finalized in the next meeting. The Fitment Committee presented a report on this matter, showing broad support for the rate reduction.
Impact on Policyholders: Lower GST rates on insurance premiums could benefit millions of policyholders by decreasing premium costs.
Previously, insurance premiums were subject to service tax before GST was introduced in 2017.
Current GST Collection Data: In August, GST collections rose by 10% to ₹1.75 lakh crore, up from ₹1.59 lakh crore in August last year.
Domestic GST revenue also increased by 9.2% to ₹1.25 lakh crore. Additionally, gross GST revenue from imported goods saw a 12.1% increase to ₹49,976 crore.
