The GST Council, chaired by Finance Minister Nirmala Sitharaman, is scheduled to discuss critical issues such as insurance premium taxation, rate rationalisation and an update on the online gaming sector at its meeting scheduled today. Important topics of discussion will include a possible GST decrease on health and life insurance premiums, as well as the impact of the recent 28 per cent GST levy on online gambling sites.
A major focus of the conference will be the fitment committee's report on the GST levied on life, health and reinsurance premiums. The committee, which includes federal and state tax officials, will submit its findings on the revenue implications and prospective changes. Currently, health insurance premiums are taxed at 18 per cent, and there is rising pressure to lower this cost or exempt some groups, such as the elderly.
During the fiscal year 2023-24, the Centre and states collected around Rs 8,262 crore in GST from health insurance premiums and Rs 1,484 crore from health reinsurance premiums. The debate over this subject has heated up, with opposition members of Parliament and Transport Minister Nitin Gadkari calling for an exemption on health and life insurance rates. Finance Minister Nirmala Sitharaman reacted, pointing out that states receive 75 per cent of GST revenues and urging opposition leaders to raise the issue at the state level.
Another key agenda item is the state of the online gambling industry. Beginning 1 October 2023, a 28 per cent GST has been imposed on entry-level bets on online gambling platforms and casinos. Many online gaming companies had previously contested the levy, noting a disparity in tax rates between skill games and chance games. The GST Council defined the tax structure at its August 2023 meeting, mandating a 28 per cent rate across all platforms. The status report will include information on GST revenue from the sector before and after the new tax regime is implemented. Changes in the tax rate on internet gambling are, however, unlikely at this time.
The council will also assess the efficacy of a national campaign against fraudulent GST registrations. From May to July 2023, officials uncovered 21,791 non-existent businesses, totalling Rs 24,010 crore in potential tax cheating. A new phase of the effort began on 16 August 2024, and will continue until 15 October 2024, with an emphasis on discovering and deleting false GST registrations.
The GST Council adopted many taxpayer-friendly measures at its meeting in June 2024. Among these were waivers of interest and penalties for demand notifications issued between 2017 and 2020, as long as the whole tax was paid by 31 March 2025. To reduce litigation, monetary restrictions for tax officers filing appeals were increased to Rs 20 lakh for the GST Appellate Tribunal, Rs 1 crore for High Courts and Rs 2 crore for the Supreme Court. The Council also reduced the pre-deposit requirement for taxpayers seeking GST appeals, which relieved financial burdens on firms.
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