The proposals to reduce or eliminate the 18% GST rate on health insurance premiums likely to be considered in the upcoming meeting.
The 54th GST Council meeting is expected to be convened in Delhi on September 9 to address key issues like rate rationalization and the taxation of health insurance. While discussions on these topics are anticipated, relief for the online gaming industry is unlikely, despite previous indications that the contentious 28% GST levy on gaming would be reviewed six months after its October 2023 implementation.
According to sources, the Council will likely review the GST levy on services imported by Indian entities from their offshore branches. Additionally, proposals to reduce or eliminate the 18% GST rate on health insurance premiums are under consideration.
Revenue from the 28% GST on online gaming has significantly increased, with monthly collections soaring from Rs 250 crore to around Rs 1,150 crore. This surge in revenue diminishes the chances of a review, making it unlikely that the Council will address this issue during the upcoming meeting. The matter of applying GST retrospectively to online gaming is currently under judicial review. Before the current framework was introduced in October, online gaming companies were taxed 18% on gross gaming revenue for “games of skill” and 28% for “games of chance.” The new GST structure taxes the full-face value of bets, a higher base than the previous gross gaming revenue.
The Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Choudhary, is also examining rate rationalization. This involves assessing whether commodities with similar characteristics have consistent GST rates and exploring the possibility of reducing the number of GST slabs from four to three. However, these changes are unlikely to be finalized during the Council’s 54th meeting.
Finance Minister Nirmala Sitharaman highlighted in June that rate rationalization would be a significant agenda item for the upcoming meeting. Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal also suggested that a three-slab GST structure is a possibility.
Another crucial topic on the agenda is the taxation of services imported from foreign branches by Indian firms. This issue has gained attention following a Rs 32,400-crore notice issued to Infosys by the Directorate General of GST Intelligence for not paying GST on such services. Additionally, the Council may deliberate on whether to exempt health insurance premiums from GST.
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