The 55th GST Council meeting, is being chaired by Finance Minister Nirmala Sitharaman, in Jaisalmer, Rajasthan, on December 21, 2024. Reportedly, the Goods and Services Tax council ( GST Council ) has not taken up the issue of life insurance rate reduction this time.
Representatives from 28 states, two Union Territories, and senior tax officials attended the session, which focused on revising tax rates, addressing industry concerns, and proposing new frameworks.
The Council approved several changes in GST rates across various goods and services, as per The Hindu Business Line reports, the following have been agreed upon by the council in its 55th Meeting—
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Popcorn:
– A 5% GST will apply to ready-to-eat popcorn with salt and spices if unpackaged.
– Pre-packaged and labeled popcorn will attract a 12% GST.
– Caramel popcorn will be taxed at 18%.
Fortified Rice Kernels: A 5% GST rate will apply regardless of their use.
Used Electric Vehicles (EVs) and Smaller Petrol/Diesel Cars: GST increased from 12% to 18% to align taxation rates.
Luxury Goods: Council Proposes hikes include increasing GST on high-end wristwatches (above ₹25,000) and shoes (above ₹15,000) to 28% from the existing 18%.
The Group of Ministers (GoM) tasked with reviewing GST rates on insurance products will consider additional suggestions in January 2025. Further, the report addressing rate rationalization for 148 items is not yet presented at the meeting.
The All India Consumer Products Distributors Federation (AICPDF) raised concerns about the proposed 35% GST on aerated beverages, warning of significant impacts on incomes and consumer demand. Distributors also flagged challenges due to rising operational costs and slowing demand.
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The GoM on GST Compensation Cess sought an extension until June 2025 to finalize its recommendations. The cess, which supports states post-GST rollout, is scheduled to end in March 2026. Additionally, discussions are ongoing to clarify whether gift cards and vouchers should be treated as goods or services for GST purposes.
While the discussions are as reported by unverified sources, it is wise to stay tuned to the official press meet, which will be covered on a real-time basis.
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