Lower GST on Food Delivery and Insurance Premiums Deferred: GST Council Highlights

The Goods and Services Tax (GST) Council, in its 55th meeting held in Jaisalmer, took up several contentious issues but deferred decisions on some key matters. This article covers the major updates from the meeting, including discussions on food delivery, insurance premiums, popcorn varieties, and used electric vehicles.

1. Deferment of GST Rate Cuts on Food Delivery and Insurance Premiums

The Council postponed a decision to lower GST rates on:

• Health and Life Insurance Premiums – Proposals to ease premiums through tax reductions were deferred.
• Food Delivery Services – E-commerce platforms like Swiggy and Zomato may face higher tax rates, but a final decision was postponed pending further review by the Fitment Committee.

2. Clarification on Popcorn GST Rates: A Fresh Debate

One of the more surprising topics discussed was the GST structure on popcorn varieties. The Council clarified:

• Regular and Salted Popcorn – Treated as namkeen, attracting 5% GST (if not pre-packaged and labelled).
• Pre-Packaged and Labelled Popcorn – Attracts 12% GST.
• Caramelised Popcorn – Considered sugar confectionery and subject to 18% GST due to the presence of added sugar.

3. GST on Used Electric Vehicles: Revised Framework

The Council recommended standardising GST on used electric vehicles (EVs):

• 18% GST for Commercial Sales – The tax on used EVs sold by businesses will be applied to the margin (sale price minus purchase price or depreciated value if claimed).
• No GST on Individual Sales – Transactions between individuals will remain exempt from GST.

4. Aviation Turbine Fuel (ATF) Remains Outside GST

The Council also discussed the inclusion of Aviation Turbine Fuel (ATF) under GST but deferred any decision. Many states opposed this move, citing concerns over losing taxation rights.

5. Next Steps: Fitment Committee to Review Pending Issues

Pending matters, such as GST rates on food delivery services and insurance premiums, were referred back to the Fitment Committee for further analysis and recommendations. Final decisions are expected in upcoming meetings.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.