Summary:
- Finance Minister Nirmala Sitharaman confirmed states’ reluctance to include aviation turbine fuel (ATF) under the GST framework.
- No decision was reached on lowering GST for insurance premiums as the Group of Ministers (GoM) required more study time.
- The council deferred the discussion on GST rate rationalization but recommended adjustments for items like fortified rice kernels and gene therapy.
Why Aren’t States Ready to Bring ATF Under GST?
At the 55th GST Council meeting in Jaisalmer, a key point of debate was whether aviation turbine fuel (ATF) should fall under the GST umbrella. However, states resisted this proposal, reasoning that ATF is closely tied to the broader crude petroleum and diesel basket. Removing ATF from this category, they argued, would disrupt the existing system. Consequently, no changes were made, and ATF continues under its current tax framework.
Additionally, decisions on two crucial issues—reducing GST on insurance premiums and rate rationalization—were postponed. The GoM, tasked with these matters, cited the need for further consultation, including inputs from the Insurance Regulatory and Development Authority of India (IRDAI).
What Other Changes Were Discussed?
Despite these delays, the Council did make headway by proposing GST rate revisions for specific items. For instance, fortified rice kernels, used in public welfare schemes, and advanced treatments like gene therapy could soon see rate adjustments.
This ongoing dialogue at the GST Council highlights the complexities of balancing state interests and national economic reforms. Will future discussions lead to a consensus on pressing taxation matters?
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