On 21st December 2024, the Goods and Services Tax (GST) Council had its 55th meeting which was presided over by Nirmala Sitharaman, Union Finance Minister of India in Jaisalmer, Rajasthan. This discussion addressed some issues notably inclusion of aviation turbine fuel (ATF) under GST, tax rates on used vehicles and clarifications on popcorn.
Decision Against Including Aviation Turbine Fuel (ATF) Under GST
The incorporation of the ATF into the GST framework proposed by the aviation sector was deliberated. Citing the potential revenue losses for the state, the council was against this idea. Though the state government has the right to set the ATF taxation across their region as it may vary in each state. Nirmala Sitharaman conveyed that the states do not want ATF to be brought under the GST framework just like petrol and diesel.
Tax on Used Vehicles
The margin value of sales of used vehicles including electric vehicles sold by registered sellers will have 18% GST, says the council. If the individuals make transactions, it will remain tax free. To ensure compliance and standardise the tax on pre owned vehicles, this move has been made.
Deferred Decisions on Insurance Premiums
Since the life and health insurance premium GST reduction needs further analysis, the proposal was deferred. The current GST on these standards are 18 % from both policyholders and industrial stakeholders.
Exemption on Penal Interest Charges by Banks
The bank and financial institutions do not require to collect GST on penalty charges imposed for loan defaults which provides an immense relief to the borrowers, clarified the GST council. Hence the borrowers facing the penalty charges will not face financial burdens anymore.
Reduction in Tax on Fortified Rice Kernels
The GST tax on the fortified rice kernels was reduced from 18% to 5 %. This reduction will make the fortified rice more accessible for the poor and address the malnutrition issues in the country.
Popcorn Tax Clarification Sparks Social Media Memes
One the hilarious outcome of this session revealed:
- Unpackaged and Unlabelled Popcorn with Salt and Spices: Subject to 5% GST.
- Pre-packaged and Spiced Popcorn: Attracts 12% GST.
- Caramelised Popcorn: Liable for 18% GST.
The council's addressing such specific item for tax clarification during a GST council meeting was found hilarious by the netizens, from the started creating ‘Popcorn Memes’.
A person humorously coined SGST as "Salted GST" and CGST as "Caramel GST," playing on the acronyms of them. People started questioning “Taxing Air and Sunlight Next?”.
Conclusion
The 55th GST council addressed several issues, though some move were made for the best, yet the popcorn tax came out as a public ridiculous amusement and critique. As the GST framework continues to evolve, stakeholder engagement and public feedback remain crucial in shaping a tax regime that aligns with the nation's economic and social objectives.
With inputs from agencies
Image Source: Multiple agencies
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Authors Bio
Ayesha Jumana A R is a dedicated content writer specializing in creative content, blogs, SEO-optimised articles, and product descriptions. She has earned recognition at the national level for critical writing, contributed to the Assist World Record for Spill Poetry, and received multiple state and district-level prizes for her poetry. Her work is featured in the anthology An Invisible Bond, available on Amazon.
