GST Council to Discuss Key Issues: Rate Rationalisation, Insurance Tax, and More
The GST Council meeting will focus on proposals aimed at rationalising the current GST structure, including the tax on life and health insurance policies, and discuss other key issues.
Gst CouncilGst Rate RationalisationInsurance TaxMinistry Of FinanceReal EstateReal EstateSep 08, 2024
The meeting is expected to focus on proposals aimed at rationalising the current GST structure, which has been a subject of much debate. One of the key issues on the agenda is the GST rate on life and health insurance policies. Currently, mediclaim premiums attract an 18% tax, which many stakeholders argue is unsustainable for consumers and insurers alike.
According to sources, the Council may consider options to allow mediclaim companies to charge a reduced GST rate of 5% without the benefit of input tax credit (ITC) or implement a uniform 5% GST rate specifically for business-to-consumer (B2C) supplies.
In addition to this, the Council may also announce the extension of the GST amnesty scheme for another year. The scheme aims to provide relief to taxpayers by waiving interest and penalties under certain conditions for tax matters arising between July 1, 2017, and March 31, 2020.
Another important item on the agenda is the clarification regarding the valuation of payments for services received from related parties, particularly in light of recent cases involving Infosys. This clarification is expected to provide much-needed guidance to businesses that engage in inter-company transactions under the GST framework.
The issue of compensation has also become increasingly pertinent, with states raising concerns about financial challenges. The agenda may include a discussion on the refund of excess payments made by the Centre to states during the GST compensation period.
Furthermore, the Council may deliberate on the threshold limit for imposition of GST on maintenance charges levied by Resident Welfare Associations (RWAs). According to sources, the threshold limit may be increased to Rs 9000–10,000 per month.
The GST applicability on the transfer of development rights within the joint development agreements (JDAs) in the real estate sector will also be discussed. A JDA is a legal contract that facilitates collaboration between landowners and developers to undertake construction projects on the landowner's property.
In addition, the Council may discuss the issue of under-construction properties, with the panel on real estate reportedly in favour of reducing GST rates to enhance housing affordability.
The Ministry of Finance will also issue a circular regarding the Amnesty Scheme, recently proposed in the Budget 2024.
The GST Council meeting is expected to be a significant one, with many important issues on the agenda. The outcome of the meeting will be closely watched by stakeholders across various sectors.
About the Ministry of Finance
The Ministry of Finance is the government ministry responsible for the financial and economic affairs of the country. It is responsible for the formulation and implementation of financial policies, including taxation and expenditure.
Keywords GST Council, GST rate rationalisation, insurance tax, Ministry of Finance, joint development agreements, real estate, under-construction properties.
Tags GST Council, GST rate rationalisation, insurance tax, Ministry of Finance, joint development agreements, real estate, under-construction properties.
Frequently Asked Questions
What is the current GST rate on life and health insurance policies?
The current GST rate on life and health insurance policies is 18%.
What is the GST amnesty scheme?
The GST amnesty scheme is a scheme that provides relief to taxpayers by waiving interest and penalties under certain conditions for tax matters arising between July 1, 2017, and March 31, 2020.
What is a joint development agreement (JDA) in the real estate sector?
A JDA is a legal contract that facilitates collaboration between landowners and developers to undertake construction projects on the landowner's property.
What is the threshold limit for imposition of GST on maintenance charges levied by Resident Welfare Associations (RWAs)?
The current threshold limit is Rs 7,500 per month per member, but it may be increased to Rs 9000–10,000 per month.
What is the expected outcome of the GST Council meeting?
The outcome of the meeting will be closely watched by stakeholders across various sectors, and it is expected to have a significant impact on the GST structure and various industries.
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