GST Council Meet Update: The 55th meeting of the GST Council is being held on Saturday (21 December) under the chairmanship of Finance Minister Nirmala Sitharaman. Several major decisions have been made in this meeting. The GST Council approved increasing the tax rate on the sale of old and used cars, including EVs, from 12% to 18%. Additionally, the GST Council decided that only 12% GST will be levied on Autoclaved Aerated Concrete (ACC) containing more than 50% fly ash.
Tax on Fortified Rice Kernels Reduced
- The tax rate on fortified rice kernels has been reduced from 18% to 5%.
Clarification on GST Rates for Popcorn
- The council clarified GST rates for popcorn. Different rates apply to popcorn spices, salt, and sugar.
- Packaged and labelled popcorn mixed with sugar and caramel will attract 18% GST.
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Insurance Matters Sent for Further Review
- No consensus was reached on insurance-related matters, and these have been sent back to the Group of Ministers (GOM) for further study.
- The decision to reduce taxes on health and life insurance policies has been postponed.
Tax Increase on Sale of Old & Used Cars
- The GST Council has approved a tax increase on the sale of old and used cars from 12% to 18%.
- The new 18% tax will apply both when the cars are sold with a margin or purchased by a business to claim depreciation.
18% GST on Used EVs and Small Cars
- The GST Council has imposed an 18% GST on the sale of used electric vehicles (EVs) and small petrol/diesel cars, replacing the current 12% rate.
Food Delivery Apps No Relief for Now
- The GST Council deferred the matter of food delivery apps. For now, a tax rate of 18% will apply.
- A proposal to levy 5% GST on profits without input tax credit (ITC) was rejected.
Higher Tax Rates on Expensive Garments
- Garments costing above ₹10,000 will now attract 28% GST. Currently, garments priced up to ₹1,000 are taxed at 5%, while those above ₹1,000 are taxed at 12%.
Tax Hike Proposed for Expensive Shoes and Watches
- GST on shoes priced above ₹15,000 per pair is proposed to increase from 18% to 28% (GST Update).
- GST on wristwatches costing more than ₹25,000 is also proposed to rise from 18% to 28%.
No Major Changes Expected in Tax Rates
- The rate rationalisation panel suggested some minor adjustments on 148 items, but no major changes are expected.
Telangana Deputy CM’s View on Taxation
- Telangana Deputy Chief Minister Mallu Bhatti Vikramarka emphasized that the taxation system should be flexible and not burden the people. He added that the state’s views would be presented at the meeting.
Proposals for Reducing GST on Other Products
- The GoM proposed reducing GST on packaged drinking water (20 litres and above) from 18% to 5%.
- GST on bicycles costing less than ₹10,000 may be reduced from 12% to 5%.
- The GST on exercise notebooks is also proposed to be reduced from 12% to 5% (GST Update).