New Delhi: GST rates on more than 100 items can be reduced. On Wednesday, the Group of Ministers (GoM) formed to rationalize GST rates considered this issue. In the meeting, to provide relief to the common man, the tax rate on some other items including bicycles and bottled water was also discussed to be reduced from 12 percent to 5 percent. During this, the issue of GST on medical and pharma related items included in the 12 percent slab also came up and it was also agreed to have a detailed discussion on this in the upcoming meeting.

What will be cheaper, what will be expensive?

At present, 12 per cent GST is levied on bicycles and their parts and accessories, while e-cycles attract a five per cent tax. West Bengal Finance Minister Chandrima Bhattacharya, who attended the meeting, said that the possibility of increasing tax rates on some other items including soda water and beverages from the current 28 per cent and the cess levied on it was also discussed to compensate for the loss caused by reducing the tax rate.

Chandrama said that tax rates on goods used by the common man should be reduced and that on food items should be brought down from 12 per cent to 5 per cent.

GST Council will take the final decision

The GoM will place its recommendations before the GST Council, which is headed by Finance Minister Nirmala Sitharaman, after its meeting on October 20. Currently, the GST system is a four-tier tax structure, with slabs of five, 12, 18 and 28 per cent.

However, as per the GST law, goods and services can be taxed up to 40 per cent. Under GST, essential goods are either exempted from tax or are taxed at the lowest rate. While luxury goods attract the highest GST of 28 per cent and cess.

Will GST be reduced on insurance premium?

The first meeting of the Group of Ministers (GoM) constituted to decide on reducing the GST on health and life insurance premiums will be held on October 19. The Group of Ministers has been directed to submit its report to the GST Council by the end of October. Based on the report of the Group of Ministers, the final decision on taxation on insurance premium is likely to be taken by the Council in its next meeting in November.

The GST Council in its meeting earlier this month had decided to form a 13-member ministerial group to decide on tax on health and life insurance premium. Bihar Deputy Chief Minister Samrat Choudhary is the convener of the group of ministers. The committee includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.

An official said, the Group of Ministers has been asked to suggest the tax rate of health/medical insurance including individual, group, family floater and other medical insurance for various categories like senior citizens, middle class, persons with mental illness. In fact, Union Transport Minister Nitin Gadkari was the first to demand the removal of GST on health and life insurance premiums. On this, he also wrote a letter to Finance Minister Nirmala Sitharaman.