The GST Council on Saturday postponed its decision to reduce taxes on insurance premiums, citing the need for further input, particularly feedback from the Insurance Regulatory and Development Authority of India (IRDAI). Finance Minister Nirmala Sitharaman announced the delay, emphasizing that several factors, including comments from IRDAI, are still awaited before any changes can be made.
Additionally, the Council provided clarification regarding the tax on popcorn. It confirmed that pre-packed, labeled ready-to-eat snacks will be subject to a 12% Goods and Services Tax (GST), while caramelized popcorn will incur an 18% GST. There was no change in the overall tax rate on popcorn, with the Central Board of Indirect Taxes and Customs (CBIC) set to issue a circular offering further clarification on the current taxation regime.
On the issue of Aviation Turbine Fuel (ATF), Sitharaman revealed that the GST Council did not agree to bring ATF under the GST regime at this stage.
Furthermore, the Council has agreed to establish a Group of Ministers (GoM) to examine Andhra Pradesh’s request for a 1% calamity cess on luxury goods. The cess aims to generate funds to address the state’s natural disaster recovery needs. Andhra Pradesh’s Finance Minister, Payyavula Keshav, stated that the GoM would explore the proposal in more detail, which would focus on luxury goods and be specific to the state.
The GST framework allows for special taxes to be imposed for a limited period in response to natural disasters, as seen previously in Kerala, which had implemented a similar 1% calamity cess following severe flooding in 2018.
