The 54th GST Council Meeting, chaired by Union Finance Minister Nirmala Sitharaman and attended by state finance ministers and tax officials, began today. The meeting is expected to address several critical issues, including rate rationalisation, reduction in tax slabs, and adjustments to the inverted duty structure. Additionally, discussions are anticipated on lowering GST rates for sectors such as online gaming and insurance.

Potential Reduction in GST on Insurance Premiums
Currently, life and health insurance premiums are taxed at 18% under GST. The Council is considering reducing this rate to make insurance more affordable. This would bring relief to consumers who are already burdened by rising premiums due to global health concerns. Lowering the GST rate on health insurance could encourage more people to opt for higher coverage, benefiting both individuals and the broader healthcare system.

Restructuring of GST Slabs
Another key issue on the agenda is the potential revamp of the GST slab structure. The Union and state finance ministers are set to discuss the roadmap for this restructuring. Simplifying the slab structure could improve compliance and make the tax system more efficient.

Decision on Payment Aggregators Deferred

During the meeting, it was noted that no decision had been made regarding the proposal to impose an 18% GST on payment aggregators for transactions under Rs 2,000. The matter has been referred to the fitment committee for further consideration.

July and August GST Collection Data
Data from the finance ministry revealed that gross GST collections in July rose by 10.3% year-on-year, amounting to Rs 1.82 trillion. Refunds issued during the month totaled Rs 16,283 crore, leaving net collections at Rs 1.66 trillion, a 14.4% increase compared to the previous year. For August, gross GST collections (based on July transactions) stood at Rs 1.75 lakh crore, reflecting a 10% growth from the previous year. After issuing Rs 24,460 crore in refunds, net collections amounted to Rs 1.5 lakh crore, up 6% from the same period last year.

Industry Voices
Rahul Agarwal, CEO of Ideal Insurance, expressed hope for a reduction in GST on health and life insurance premiums. He said, "We have been waiting for relief from the 18% GST on retail health and life insurance premiums for a long time. Reducing this tax to 5% would make insurance more affordable, especially for middle-class families, and encourage them to choose higher coverage policies."

This GST Council meeting is seen as crucial in determining the future trajectory of the GST system in India, with a focus on easing the financial burden on consumers and streamlining the tax structure.

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