GST Council Meeting Today: Expectations on Insurance Premium Tax and Online Gaming Report

The Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman and including state finance ministers and tax officials, is set to convene today (September 9).

The agenda is expected to cover several key topics, including the taxation of insurance premiums, recommendations on rate rationalisation from the Group of Ministers (GoM), and an update on online gaming revenue. Additionally, the fitment committee is anticipated to present a report on the GST implications for life, health, and reinsurance premiums, along with their revenue impact.

Here's What to Expect on the Agenda:

Taxation on Health and Life Insurance

The GST Council will discuss potential reductions in the tax burden on health insurance, possibly lowering the current 18% rate or considering exemptions for certain groups, such as senior citizens. The Council will also address possible GST cuts on life insurance premiums. The Centre and states have collected ₹8,262.94 crore from GST on health insurance premiums and ₹1,484.36 crore from GST on health reinsurance premiums.

This topic has generated significant debate in Parliament, with opposition leaders and Union Transport Minister Nitin Gadkari advocating for GST exemptions on both health and life insurance premiums.

Rate Rationalisation

During the August GoM meeting, West Bengal Finance Minister Chandrima Bhattacharya highlighted the need for rate rationalisation, prompting a referral to the fitment committee for detailed data analysis. The GoM has largely maintained the existing four-tier GST slab system—5%, 12%, 18%, and 28%—but has instructed the fitment committee to explore potential areas for rationalisation.

Online Gaming Revenue Report

The GST Council will review a status report comparing GST revenue from online gaming before and after October 1, 2023. Prior to this date, many online gaming companies did not pay GST and advocated for different tax rates based on game types.

Since October 2023, the government has implemented a 28% GST on entry-level bets placed on online gaming platforms and casinos. This tax was recommended by the GST Council in August 2023 and subsequently incorporated into the Central GST law for clarity.

Crackdown on Fake Registrations

The GST Council will also review the effectiveness of the ongoing crackdown on fake GST registrations and the actions taken against violators. The total suspected GST evasion amount will be presented to the Council. Launched on August 16 and running until October 15, this drive aims to identify and verify suspicious or fraudulent GSTINs and eliminate fake billers.

A similar campaign from May 16 to July 15 last year revealed 21,791 non-existent GST-registered entities—11,392 under state tax jurisdiction and 10,399 under CBIC jurisdiction. The drive uncovered a total of ₹24,010 crore in suspected tax evasion, including ₹8,805 crore from states and ₹15,205 crore from the Centre.

Other Notifications and Amendments

The GST Council is expected to approve the notifications discussed in the previous meeting on June 22, including the amnesty scheme and various amendments to the GST law enacted through the Finance Act 2024 in August.

The 53rd meeting recommended several key changes, such as waiving interest and penalties for demand notices under the CGST Act, setting monetary limits for appeal filings at ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for the High Court, and ₹2 crore for the Supreme Court. Additionally, it proposed introducing a 12% GST on milk cans and carton boxes, among other recommendations.