GST Council to Sweeten the Deal for Online-Ordering Foodies as GST Rate Cuts Expected in Meeting

The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers, convenes today, December 21, in Jaisalmer, Rajasthan. This apex decision-making body for taxes will deliberate on a range of proposals aimed at reshaping India’s indirect tax framework.

Additional buzz surrounds potential relief for online food delivery consumers. Sources indicate that the Council may slash GST on delivery charges from the current 18% to 5%, offering a cost benefit to users of e-commerce platforms. Meanwhile, there is optimism for a GST exemption on individual term life insurance policies and reinsurance, a proposal championed by a GoM on insurance. If approved, this measure could reduce insurance premium costs, helping penetrate coverage for citizens while providing the insurance industry a significant boost.

Among the key items on the agenda are potential revisions to the Goods and Services Tax (GST) rates for life and health insurance premiums, luxury goods, and the much-anticipated inclusion of aviation turbine fuel (ATF) under GST.

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The Council is also expected to discuss rate adjustments on 148 products, including old and used electric vehicles (EVs) and smaller petrol and diesel vehicles. According to sources, proposals could raise the GST on these items from 12% to 18%, following recommendations by the Fitment Committee. Separately, the Group of Ministers (GoM) on GST rate rationalisation is considering higher rates for luxury and sin goods, potentially impacting items such as high-end cars, tobacco products, and other non-essential commodities.

One of the most closely watched issues is whether ATF will finally be brought under the GST regime. Industry experts believe that if the Council approves this move, airlines could benefit from input tax credit (ITC) on ATF, thereby lowering operational costs. Currently, ATF remains subject to central excise duty, with a lower 2% rate available under the Regional Connectivity Scheme (RCS). Introducing a uniform GST on ATF has been a longstanding demand from the aviation sector, seeking greater tax predictability.

Complete Draft Replies of GST ITC Related Notices, Click Here

Since GST’s inception on July 1, 2017, five major commodities—crude oil, natural gas, petrol, diesel, and ATF—have remained outside its purview, leaving central and state governments to impose excise duty and VAT. Extending GST to these items could simplify taxation, ensure a level playing field, and generate additional revenue.

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