GST Council Meet: Key Issues Include Insurance Premium Tax and Online Gaming Report

The GST Council is set to meet on September 9, 2024, to discuss several important issues related to Goods and Services Tax (GST). The meeting will be chaired by Finance Minister Nirmala Sitharaman, and key topics include tax on insurance premiums and a status report on online gaming.

Insurance Premium Taxation

One of the critical issues to be discussed is the GST on insurance premiums, specifically life, health, and re-insurance premiums. The Fitment Committee, consisting of central and state tax officials, is expected to present a report on the revenue generated from these premiums. In the financial year 2023-24, the GST collection from health insurance premiums amounted to ₹8,262.94 crore, while health re-insurance premiums generated ₹1,484.36 crore.

There has been ongoing debate in Parliament about removing GST from health and life insurance premiums, with opposition members and even the Minister of Transport urging the government to eliminate the tax. In response, Finance Minister Sitharaman highlighted that 75% of the GST collected goes to the states and advised members to bring the matter up in the GST Council meetings.

Health Insurance for Senior Citizens

The Council is likely to consider whether the current 18% GST on health insurance premiums should be reduced or if certain categories, such as senior citizens, should receive exemptions. A decision may also be made on whether to lower the GST on life insurance premiums.

Rate Rationalization

Another issue up for discussion is the rationalization of GST rates. At a recent meeting of the Group of Ministers (GoM) on Rate Rationalization, Chandrima Bhattacharya, the Finance Minister of West Bengal, raised the issue. The GoM decided not to alter the existing 5%, 12%, 18%, and 28% GST slabs but suggested further examination by the Fitment Committee to explore possible adjustments.

Online Gaming Status Report

The central and state tax authorities will present a status report on online gaming to the GST Council. This report will include data on GST collection from the online gaming sector before and after October 1, 2023.

Starting from October 1, 2023, a 28% GST has been applied to the entry-level bets in online gaming and casinos. Before this, many online gaming companies did not pay the 28% GST, arguing that there was a distinction between a “game of skill” and a “game of chance.” However, the GST Council clarified in **August 2023** that all online gaming platforms must pay 28% GST. The Central GST laws were amended to enforce this tax.

Offshore gaming platforms were also required to register with GST authorities and pay the tax, or risk being blocked by the government. The GST Council decided that after six months of implementation, the tax on the online gaming sector would be reviewed. While the council is set to review the taxation status of the sector, sources suggest there is little likelihood of a change in the current tax rate.

Conclusion

The upcoming GST Council meeting is significant, as it will address critical issues affecting the insurance and online gaming sectors. The discussions on rate rationalization, tax exemptions for senior citizens, and the status of online gaming taxation are expected to set the tone for future decisions.

This meeting is particularly crucial given the growing demand for changes in GST rates across various sectors.