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Jaisalmer: The Goods and Services Tax (GST) (GST ) Council on Saturday decided to impose 18 percent GST on the margin price of an old electric vehicle purchased for business use. The council also agreed to keep aviation fuel (ATF) out of the GST system. The GST Council agreed to issue a clarification regarding tax on popcorn. The council said that 12 percent tax will be levied on pre-packaged and labeled ready-to-eat snacks. The GST Council said that if the snacks are caramelized, then 18 percent GST will be applicable on it.
Finance Minister Nirmala Sitharaman said on Saturday that the states do not agree to bring aviation turbine fuel under the purview of Goods and Services Tax (GST).
No decision on insurance premium
“States were not comfortable about it. They did not want ATF because they see it in the category of crude petroleum-diesel product and so they said it cannot be removed alone. So the status quo is maintained on it,” he told reporters after the 55th GST Council meeting here.
Further, he said no decision was taken regarding reduction in GST on insurance premium as the Group of Ministers (GOM) needed more time to study the issue. He said suggestions were awaited from several parties, including insurance regulator IRDA.
He further said the GST Council has also deferred a decision regarding rate rationalisation as the GoM needed more time for a comprehensive study.
Recommendation to change tax rates on 148 items
Meanwhile, the much-discussed recommendation of the Group of Ministers to change tax rates on 148 items was not placed before the Council. Some members of the Council, headed by Union Finance Minister Nirmala Sitharaman and comprising finance ministers of state governments, felt that more deliberations were needed before arriving at a final decision regarding insurance taxation.
Bihar Deputy Chief Minister Samrat Choudhary, who heads the Group of Ministers committee on insurance, said another meeting was needed to decide on taxation of group, individual, senior citizen policies. “Some (council) members said it needed more discussion. We (GoM) will meet again in January,” Choudhary told reporters here.
The GST Council has decided to set up a Group of Ministers to consider Andhra Pradesh’s demand for levying a one per cent disaster cess on certain luxury items to raise resources to deal with natural disasters.
Consensus on forming a Group of Ministers
Andhra Pradesh Finance Minister Payyavula Keshav said there was a consensus that a Group of Ministers be formed. “The cess will be imposed on luxury items and state special levies,” Keshav said. Andhra Pradesh was hit by floods in September-October. “We have suggested a one per cent cess as a cushion to get back to normalcy. There was a consensus to set up a GoM,” Keshav said.
The GST Council agreed to issue a clarification on tax on popcorn. The council said ready-to-eat snacks that are pre-packaged and labelled will attract a 12 per cent tax. If the snacks are caramelised, the GST Council said, it will attract 18 per cent GST.
Ready-to-eat popcorn that has been seasoned with salt and spices, if it is pre-packaged and not labelled, is currently attracting 5 per cent GST. If it is packaged and labelled, it attracts 12 per cent GST. However, when popcorn is mixed with sugar (caramel popcorn), its basic quality becomes similar to that of sugar confectionery, and will attract 18 per cent GST, according to the clarification.
Finance Minister Nirmala Sitharaman said that the GST Council has reduced the tax rate on fortified rice to five percent. She informed that gene therapy is now exempted from GST.
The GST Council also deferred the decision on tax rates for food delivery platforms like Swiggy and Zomato.
