The inclusion of ATF under GST, if approved, could bring uniformity in taxation across states and allow airlines to claim input tax credit (ITC) on fuel purchases—addressing a long-standing demand from the aviation sector.
- The inclusion of ATF under GST, if approved, could bring uniformity in taxation across states and allow airlines to claim input tax credit (ITC) on fuel purchases—addressing a long-standing demand from the aviation sector.
The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman and including state finance ministers, will convene today, December 21, in Jaisalmer, Rajasthan. This pivotal gathering of the apex body for indirect taxes is expected to focus on significant rate changes for life and health insurance, luxury items, and the possible inclusion of aviation turbine fuel (ATF) under the GST framework.
"The Union Finance Minister also referred to the Scheme for Special Assistance to States for Capital Investment (SASCI), which was first announced in the Union Budget 2020-21, and acknowledged that it has received a very good response from the states," an official statement said.
West Bengal Finance Minister Chandrima Bhattacharya said the Union finance minister has said that funds would be allotted to all states towards disaster mitigation.
Bhattacharya requested 50 per cent of the 50-year interest-free loans be tied to disaster management in order to mitigate states that face natural disasters frequently.
A key agenda item is the proposal to lower GST rates on life and health insurance premiums, providing potential relief to policyholders. Simultaneously, the Group of Ministers (GoM) on GST rate rationalization has proposed increasing taxes on luxury and sin goods. The inclusion of ATF under GST, if approved, could bring uniformity in taxation across states and allow airlines to claim input tax credit (ITC) on fuel purchases—addressing a long-standing demand from the aviation sector.
Several states demanded an increase in allocation under the 50-year interest-free loan scheme, the sources said, adding they also requested for more flexibility in the SASCI scheme under this category.
Rate Revisions on EVs and Smaller Vehicles
The Council will also deliberate on rate changes for 148 items, including used electric vehicles (EVs) and smaller petrol and diesel cars. These items may see a GST rate hike from 12% to 18%, according to sources.
When GST was implemented on July 1, 2017, key commodities such as crude oil, natural gas, petrol, diesel, and ATF were kept outside its purview. These items continue to attract excise duty and VAT from central and state governments. Industries, particularly aviation, have consistently pushed for these commodities to be brought under GST to ensure standardization and streamline input tax credits.
Relief Expected on Online Food Delivery Charges
Consumers ordering food online could see a reduction in GST on delivery charges from 18% to 5%. This proposal, recommended by the fitment committee, will be discussed during the meeting in Jaisalmer. If approved, it would make food delivery more affordable for millions of users relying on e-commerce platforms.
Cheaper Insurance on the Horizon?
Life and health insurance could become more affordable if the GST Council adopts the GoM's proposal for exemptions. According to reports, the GoM may suggest a full GST exemption on individual term life insurance policies and their reinsurance. These recommendations are expected to be a major highlight of today's discussions.
The outcomes of the 55th GST Council meeting could have a substantial impact on various sectors, potentially offering relief to consumers while addressing critical demands from industries. Stay tuned for updates as decisions unfold.