GST Council meets to discuss rate changes: Impact on sectors
The GST Council is meeting this week (September 3-4) to discuss a possible rationalization of GST rates.
They're looking to scrap the current 12% and 28% GST rates and switch to just two main slabs: 5% and 18%.
There's also talk of a steep new 40% rate for luxury items like tobacco.
If these changes go through, they could significantly impact the insurance, automobile, and fertilizer sectors.
Insurance, automobile, and fertilizer sectors to feel the heat
For insurance, dropping GST on life and health policies from 18% down to as low as 5% or zero sounds good—but industry experts warn it may not reduce premiums because companies would lose key tax credits.
On the flip side, small car and motorcycle buyers might get lucky if GST drops from 28% to 18%, making vehicles more affordable.
The fertilizer sector is hoping for lower input taxes too—and asking for refunds on past credits—though government subsidies may balance things out.
Final decisions are expected soon.