Introduction: GST Updates Impacting Your Wallet
The 55th GST Council Meeting, chaired by Finance Minister Nirmala Sitharaman, introduced significant changes. From caramel popcorn tax rates to health insurance relief.
Caramel Popcorn Taxed Higher Than Namkeen
The GST Council clarified that caramel popcorn, with added sugar, will attract a higher tax rate compared to namkeen. This aligns with the principle of taxing products with added sugar differently, much like carbonated drinks and sweetened juices.
Taxation on Electric Vehicles (EVs)
- New electric vehicles (EVs) to be taxed at 5% GST.
- No GST for old EV sales between individuals.
- Company sales of used EVs, petrol, and diesel vehicles will now attract an 18% tax on the margin.
Health Insurance: Relief Under Consideration
The Group of Ministers (GoM) is exploring GST exemptions for:
- Senior citizen health insurance
- Term life insurance
- Lower GST rates (5%) on policies with coverage up to ₹5 lakhs
The final decision awaits inputs from IRDAI.
Key Exemptions & Reductions
- Gene therapy: Fully exempted from GST.
- Fortified rice kernels: Tax rate reduced to 5%.
- Surface-to-air missiles: No GST applied.
- Black pepper from farmers: Exempted from GST.
Other Notable Updates
- Restaurant Services: Decision on 5% GST for e-commerce operator services deferred.
- Penalty Charges by Banks: No GST on penalties for non-compliance with loan terms.
- Payment Aggregators: Exemption applicable only for transactions under ₹2,000.
Impact of Calamity Cess & Construction Materials
The council discussed a 1% calamity cess on selected goods and services. Additionally, Autoclaved Aerated Concrete blocks with over 50% fly ash content will now attract 12% GST.
Conclusion: What’s Next?
The GST Council continues to refine taxation policies to align with economic priorities. Businesses and consumers must stay informed to manage compliance effectively.