Compensation cess continuation: The Council is expected to provide clarity on the continuation of the GST compensation cess. Sources suggest that the cess may extend “well into” 2025-26 (FY26). There will also be discussions on whether to eventually replace this cess with a tax or a new cess.
The Karnataka government on Friday urged Prime Minister Narendra Modi to advise the GST Council, which is set to meet on September nine, to abolish the 18 per cent tax on health insurance premiums.
The Goods and Services Tax (GST) Council in its meeting on Monday is likely to decide on four options regarding tax treatment of health insurance, with the cost to the exchequer potentially ranging from nearly Rs 650 crore to Rs 3,500 crore.
As the GST Council readies to discuss lower levies on health and life insurance on Monday, states are seen to be reluctant to agree to cut tax, fearing significant revenue loss, particularly on medical covers.
On the demand of states, especially of the Opposition-ruled states such as Karnataka, the upcoming GST Council on September 9 is likely to have a detailed discussion on the compensation cess collections so far, since the time of roll-out of GST.
The 54th GST Council is scheduled to meet on September 9 in New Delhi to deliberate upon a proposal to clarify that an 18% GST should be levied on payment aggregators whose platforms are used for digital payment transactions of less than ₹2,000 via debit cards, credit cards, and other payment methods, according to sources.
As the 54th GST Council Meeting approaches on September 9, 2024, in New Delhi, many are eagerly waiting to see what changes might come. Business leaders and industry groups are hoping that the meeting will address important issues and bring some clarity to tax rules.
The Council, whose parleys steered by the Union Finance Minister with States’ representatives are critical for resolving taxpayer challenges and setting broader policy direction, ought to meet regularly at such frequency.
Karnataka is expected to pitch for GST exemption on health and life insurance only on such products used by the working and lower middle classes at the upcoming GST Council meeting.
The GST Council in its meeting next week is likely to deliberate upon the status report on taxation of online gaming, in addition to the progress of the drive against fake Goods and Services Tax registration, sources said.
