54th GST Council Meeting On Sep 9: Experts Hope Rate Rationalisation, Check Top Expectations

54th GST Council Meeting 2024: The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, will meet on September 9, 2024. Experts feel that the meeting is expected to start a discussion on rate rationalisation, reducing tax slabs, besides removing duty inversion under GST.

“The 54th Meeting of GST Council will be held on 9th September 2024 at New Delhi,” the Council recently informed in a post on X.

The GST Council, comprising finance ministers of the Centre and states, is the apex decision-making body about Goods and Services Tax (GST), which was rolled out on July 1, 2017.

54th GST Council Meeting Expectations

Saurabh Agarwal, tax partner, EY India, underlined key expectations including a much-needed overhaul of GST rates, clear guidelines for foreign airlines and shipping companies on deemed import of services and resolution of long-standing disputes related to secondment.

Additionally, Agarwal hoped that the council is expected to address the GST implications of services provided by foreign branch offices to their Indian headquarters.

“Industry is hopeful for positive decisions, especially on rate rationalization, which can stimulate growth and investment. Clarifying the taxation of airlines, shipping, and cross-border services will also provide much-needed relief,” Agarwal added.

Insurance Services

With effect from July 2022, hospital room rents charged above Rs 5000 have been brought into the GST net. This is the first time that such services by hospitals have charged to GST, highlighted Stella Joseph, partner at Economic Laws Practice.

Joseph pointed out that the insurance companies giving health insurance to policyholders are ultimately responsible for paying the hospitals as regards such room rents and the applicable GST.

“However, whether the insurance companies are eligible for credit of such GST paid, is an aspect which remains uncertain. This is because, under Section 17(5) of the CGST Act, credit for “health services” is restricted. Ideally, it should be clarified that insurance companies, being the person liable to pay the hospitals, are eligible for a credit of GST charged by hospitals on the hospital room rents,” Joseph underlined.

As regards general insurance services provided to SEZ units, the position needs to be clarified as regards whether these can be considered as used for authorized operations and thus eligible for zero-rated treatment, Joseph added.

Such insurance services generally cover the Company’s employees and their relatives as well. However, “such services should be understood as for the benefit of employees, which are the core assets of the Company and hence should be seen as being used for authorized operations of the SEZ and thus eligible for zero-rating,” Joseph said.

After the previous Council meeting on June 23, Sitharaman said the next meeting of the GST Council the Group of Ministers (GoM) on rate rationalisation under Bihar Deputy Chief Minister Sumant Chaudhary, will give a presentation on the status of the work and aspects covered by the panel and work pending before the panel.

“There will be a presentation by the GoM irrespective of whether the report is draft… and then Council will start the discussion on rate rationalisation in the next meeting,” Sitharaman had said.