The GST Council held its 55th meeting and introduced rate changes and clarifications on various tax issues.
Clarifications included that items like pepper, raisins, gift vouchers, and penalties levied on borrowers by banks and non-banking finance companies, are not taxable are not taxable.
The decision to apply a three-tiered tax rate for popcorn, with higher taxes on sweetened varieties, was made after years of delay.
The Council did not consider recommendations from a panel on adjusting GST rates or reviewing the taxation of life and health insurance policies.
The delay in addressing insurance taxation has caused uncertainty, leading consumers to delay purchasing policies.
The Council’s inaction on long-promised GST rate rationalization worsens uncertainty for businesses and consumers.
The real estate sector was impacted by the reversal of a Supreme Court decision on input tax credits for construction costs of commercial properties.
These delayed decisions and inconsistencies hurt investor confidence and could affect India’s investment climate.
The prolonged uncertainty and indecision risk harming consumption and private investment, which depend on tax certainty.
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