The 55th GST Council meeting held in December 2024 brought several significant rate changes and clarifications. Here is a plain-English breakdown of what changed and what it means for your business.
Insurance Premium GST — Relief on the Way
The Council deferred a final decision on reducing GST on health and life insurance premiums, but formed a Group of Ministers (GoM) to present recommendations by January 2025. Current rate of 18% on health insurance remains until then. This is a significant relief measure being actively considered.
Online Gaming — Clarification on 28% Rate
The 28% GST on online gaming (on full face value of deposits) has been upheld. The Council clarified that this applies to all skill-based and chance-based games alike. Companies in this space need to ensure compliance with the revised valuation mechanism.
Aviation Turbine Fuel (ATF)
ATF has not been included under GST in this meeting despite industry requests. It continues to attract state-level VAT, resulting in cascading tax effects for airlines. The issue has been deferred for further deliberation.
Rate Changes on Goods
Several goods saw rate rationalisation — fortified rice kernel moved from 18% to 5%, gene therapy exempted from GST, and black pepper / raisins sold by agriculturalists clarified as exempt. Popcorn sold in cinemas attracted controversy with a multi-tier rate structure being introduced.
Key Compliance Clarifications
The Council clarified that no GST applies on penal charges levied by banks and NBFCs. It also clarified the place of supply rules for data hosting services provided to foreign companies, which has significant implications for IT companies.
What Businesses Should Do
Review your product/service HSN classifications in light of the rate changes. If you are in insurance, online gaming, or BFSI sectors, consult your tax advisor immediately. Update your billing software for any applicable rate changes from the effective date of notification.
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Our Indirect Tax · GST practice at Shahi & Co. assists businesses across New Delhi and Pan-India.