Recommendation to Cut GST on Packaged Water and Bicycles

Aakhir Tak – In Shorts

The Centre recommends reducing GST on packaged water and bicycles under ₹10,000. Discussions on GST exemption for health and life insurance premiums are ongoing. The committee proposed lowering GST on bicycles and exercise notebooks.

Aakhir Tak – In Depth

The central government has proposed a reduction in GST rates on packaged drinking water and bicycles costing less than ₹10,000. During the recent meeting of the Group of Ministers (GoM), a decision was made to exempt GST on health insurance premiums for coverage up to ₹5 lakh. However, for health insurance policies with coverage exceeding ₹5 lakh, an 18% GST will continue to apply.

The GoM suggested revising GST rates on various items, including packaged drinking water, bicycles, exercise notebooks, and luxury watches. This recommendation will be forwarded to the GST Council, which is set to make a final decision in its meeting next month.

Bihar Deputy Chief Minister Samrat Chaudhary stated that every GoM member is focused on providing relief to the public. He also mentioned that the committee will meet again before submitting its report. The report is scheduled to be presented to the GST Council by the end of October.

In the fiscal year 2023-24, the total GST collection from health insurance premiums was ₹8,262.94 crore.

Currently, the GST structure consists of four tiers at rates of 5%, 12%, 18%, and 28%. Essential goods are either exempt from GST or taxed at the lowest slab, while luxury items attract the highest rate.

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