A Group of Ministers (GOM) on GST Rate Rationalisation on Thursday could not finalise any recommendations. It will have another meeting next meeting on October 19 and likely to focus on GST for insurance premia.
It was second meeting under the convenorship of Bihar Deputy Chief Minister Samrat Choudhary and took place in Goa.
According to sources, the meeting did discuss GST rates on various items such as educational ones and textiles, but could not conclude. Not it is expected that discussion will continue in its next meeting and accordingly a report will be prepared for the next GST Council meeting.
Meanwhile, the next meeting will be crucial, as there will be discussion on GST for various kinds of insurance. The Committee has to finalise its story by end October as Finance Minister Nirmala Sitharaman had said on September 9 that the GOM has been asked to give its report by October end which will be considered by the GST Council in its next meeting in November.
As things stand, the GST rate on premia for health insurance, term insurance plans and unit-linked insurance plans, attract 18 per cent GST.
On endowment plans, the GST is applied differently. While it is 4.5 per cent for premium paid during the first year, it is 2.25 per cent from the second year. For life insurance in the form of single premium annuity policies, the GST rate is 1.8 per cent.
Rates are the same for all age groups and can be reviewed based on the recommendation of the GST Council.
GoM is working on the rate rationalisation exercise not just in terms of slab but also in term of individual items. As on date, there are four normal rates tax rate slabs — 5, 12, 18 and 28 per cent — besides a few special rates such as 0.25 per cent (rough or sown diamond) and 3 per cent (gold and silver). Some goods in the 28 per cent-slab also attract compensation cess of up to 22 per cent, taking the total rate to 50 per cent.
Last month Chaudhary convened the first meeting of the reconstituted GoM, where majority of the members were in favour of retaining the present structure.
“More discussions will happen before a final decision is taken,” he said while adding that the group has received representations from restaurants, beverages and online gaming sectors, which will be reviewed and some of them will be sent to the Fitment Committee.