Key Highlights from the 55th GST Council Meeting: Updates and Impacts

 The 55th GST Council meeting, held on December 21, 2024, introduced several significant decisions impacting various sectors:

1. GST Rates on Popcorn

• Non-Branded Salted Popcorn: 5% GST
• Pre-Packaged and Branded Popcorn: 12% GST
• Caramel Popcorn: 18% GST

This tiered taxation has sparked public and political debate over the complexity of the GST system.

2. Aviation Turbine Fuel (ATF) Exclusion from GST Regime

• The Council rejected the aviation industry's proposal to include ATF under GST, leaving taxation to state governments.
• Airlines had advocated for a uniform tax to reduce operational costs, but states opposed due to potential revenue loss.
  
  

3. GST on Used Vehicles

• An 18% GST rate is now applicable on the sale of all used or old vehicles, including electric ones, by registered sellers.
• Direct sales between individuals remain exempt from this tax.
   

4. Deferral of Tax Reductions on Insurance Premiums

• Plans to reduce taxes on certain life and health insurance premiums were postponed for further discussion.
• This decision is crucial for increasing insurance adoption among citizens.

5. Formation of Committee for IGST Settlement Improvements

• The Council approved the creation of a committee to suggest enhancements to the Integrated Goods and Services Tax (IGST) settlement process.
• Changes are expected to be finalized and implemented by March 2025.
  
  

6. Extension for GST Compensation Restructuring

• The timeframe for the Group of Ministers on restructuring GST compensation has been extended until June 30, 2025.
  
  

These decisions reflect the Council's ongoing efforts to refine the GST framework, balancing revenue considerations with industry and consumer interests.