GST Council ups tax on sale of used automobiles by companies; says fee on popcorn depends upon flavour, ETCFO

The products and providers tax council Saturday determined to maintain present vouchers, provided by a number of sectors equivalent to retailers, out of tax purview, a uniform tax fee of 18% on used automobiles together with electrical autos bought by companies, whereas deferring a call on discount in tax fee on insurance coverage merchandise.

The change in fee of tax within the case of EVs is not going to affect particular person sellers,

The council, chaired by union finance minister Nirmala Sitharaman, determined to cut back the tax fee on fortified rice kernels to five% from 18%.

It agreed to make clear that able to eat popcorn, which is pre-packaged and labelled blended with salt and spices, to face 12% and caramelised popcorn a fee of 18%, persevering with with the prevailing regime.

A call on lowering the speed of tax on insurance coverage was deferred as there was nonetheless a scarcity of consensus inside the group of ministers wanting into the tax construction for the sector. The matter has now been referred to the fitment panel for additional examination.

The GoM had really helpful exempting insurance coverage premiums paid for time period life insurance coverage insurance policies from GST and premium paid by senior residents for medical insurance cowl. It had additionally urged GST exemption on premium paid by people, aside from senior residents, for medical insurance with protection of as much as Rs 5 lakh.

The report of the GoM on fee rationalisation, which had really helpful tweaks in 148 gadgets, was not tabled earlier than the Council. Bihar deputy chief minister Samrat Chaudhary mentioned it may very well be tabled on the subsequent assembly.

Clarification on tax on used automobile gross sales

The council determined to lift the speed of tax to 18% from 12 % for all autos together with EV’s which shall be relevant solely on the worth that represents margin of the provider, that’s, the distinction between the acquisition worth and promoting worth (depreciated worth if depreciation is claimed).

At current, all outdated and used autos together with EVs (aside from petrol autos of engine capability of 1200 cc or extra and of size of 4000 mm or extra, diesel autos of engine capability of 1500 cc or extra and of size of 4000 mm and SUVs) entice 12% GST. Outdated and used petrol autos of engine capability of 1200 cc or extra and of size of 4000 mm or extra, diesel autos of engine capability of 1500 cc or extra and of size of 4000 mm and SUVs entice 18%. The council has now authorized making this fee uniform at 18% for all autos, together with EVs.

The Group of Ministers (GoM) on GST compensation cess is prone to get a six-month extension until June 2025, to submit their report. The compensation cess regime involves an finish in March 2026, and the GST Council has arrange a panel of ministers, underneath Union Minister of State for Finance Pankaj Chaudhary, to determine the longer term course of the cess.