BS EDIT: Key GST rate and cess decisions ahead

By Business StandardPublished On Sep 11, 2024

54th GST Council meet: Key decisions

Foreign airlines exempted from tax on some service imports, e-invoicing extended to b2c transactions, GST lowered on some cancer drugs

GST on insurance under review

A GoM will evaluate reducing GST on life and health insurance to boost affordability and increase insurance penetration in India

Rate, slab rationalisation

The Council is reviewing the GST rate structure as current collections, including cess, are underperforming relative to pre-GST levels

Compensation cess future

The Council must decide on the future of the compensation cess, collected to repay pandemic debt, after its repayment by March 2026

Impact of high tax rates

High GST rates, such as the 50% tax on certain cars, may be hard to justify, and rationalisation is needed to prevent system complexity

Revenue-reform balance

The challenge is to rationalise rates and adjust cess collections while ensuring the GST system remains efficient and boosts tax revenue