The 55th GST Council meeting, led by Finance Minister Nirmala Sitharaman in Jaisalmer, Rajasthan, made several updates to the taxation framework but postponed discussions on restructuring GST for insurance products.
A media address by Finance Minister Nirmala Sitharaman is expected soon. Highlights from the meeting included adjustments to tax rates in various sectors: –
Popcorn Taxation:
Popcorn with salt and spices (when unpackaged) will now be subject to 5% GST, while pre-packaged popcorn will incur a 12% tax, and caramel-covered popcorn will be taxed at 18%.
The GST Council later clarified that ready-to-eat snacks that are pre-packed and labeled will attract a 12% tax, while caramelized popcorn will have an 18% tax. It was noted that the tax rate on popcorn remains unchanged, and the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular regarding the current popcorn tax rates. –
Fortified Rice Kernels:
The GST rate has been standardized to 5%, a reduction from the previous rate of 18%, regardless of the intended use. – **Autoclaved Aerated Concrete (ACC) Blocks:** The GST for ACC blocks made with over 50% fly ash has been lowered from 18% to 12%.
Used Cars and Electric Vehicles (EVs):
The Council approved an increase in GST on the sale of old and used cars, including smaller petrol/diesel vehicles and EVs, from 12% to 18%.
Union Minister of State attended the meeting for Finance Pankaj Chaudhary, along with various state and union territory finance officials.
Media reports indicated that the Council decided to postpone discussions on insurance-related GST changes, stressing the need for further review after consultations among a Group of Ministers (GoM).
Bihar Deputy Chief Minister Samrat Chaudhary, head of the GoM, mentioned that additional discussions are necessary, with plans to reconvene in January.
He stated, “We will submit the GoM report on rate rationalization at the next Council meeting.” The Council decided against reducing tax rates on life and health insurance premiums during this meeting, agreeing that more technical discussions are required.
The updated rulings aim to refine the tax structure on items like popcorn, fortified rice, and AAC blocks while enhancing revenue through revisions in used vehicle taxation.
However, the proposals regarding GST for insurance products will continue to be reviewed before any final decisions are reached.
