Government seeks to exclude health and life insurance from Goods and Services Tax, presenting a fresh plan for taxation adjustments.
The GST Council, the apex body responsible for overseeing the Goods and Services Tax (GST) in India, is set to consider a series of proposed reforms and new tax rates in its upcoming meeting, scheduled by the end of October.
The Council, comprising ministers from various states including Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana, has been mandated to submit its report by this date.
The proposed reforms aim to bring about a more efficient GST system. One of the key changes is the categorization of products based on merit and standard. This move is expected to streamline the GST structure, making it more effective and fair.
The government has also proposed several measures as part of the GST reform. These include the introduction of a degressive depreciation allowance (degressive AfA) for the years 2025 to 2027, a phased reduction of the corporate tax rate starting January 1, 2028, and improvements to the research allowance and self-assessment systems.
Another significant proposal is the exemption of insurance from the GST as part of the GST reform. This move is aimed at reducing the overall tax burden on the insurance sector.
In the fiscal year 2023-24, the Centre and states collected a substantial amount through GST. On health insurance premium, they collected Rs 8,262.94 crore, while on health reinsurance premium, they collected Rs 1,484.36 crore.
The GST reform proposal also includes new ways of levying goods and services tax at two rates: 5% and 18%. A 13-member Group of Ministers (GoM) on health and life insurance was set up in September to suggest tax rates for these new categories.
The latest GST news includes updates on these proposed reforms and new tax rates. The Council's decision is eagerly awaited as it will shape the future of the GST in India, potentially leading to a more efficient and fair tax system for all.
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