GST Council meeting | Sitharaman levies 5-18% tax on popcorn, exempts gene therapy

Finance Minister Nirmala Sitharaman on Saturday (December 21) announced that gene therapy has been exempted from Goods and Services Tax (GST). This decision marks a significant move in the healthcare sector, particularly for advanced treatments, as it removes the tax burden on gene therapy, making it more accessible.

Briefing the media on the outcome of the 55th GST Council meeting in Jaisalmer, Sitharaman said the states did not agree on bringing aviation turbine fuel (ATF) under the ambit of GST.

“States did not feel comfortable. They didn't want the ATF because they saw it as part of the crude petroleum diesel basket, and therefore they said that it alone cannot be taken out, and therefore that continues to remain where it is today,” she said.

Also read: 55th GST Council meet: Sin tax, rates changes likely to reshape economy

Defers insurance overhaul

She also revealed that no decision was taken with regard to reduction in GST on insurance premiums as the Group of Ministers (GoM) needed more time to study the issue. Many inputs are awaited including the one from insurance regulator IRDAI, she said.

She further said that the GST Council has also deferred the decision with regard to rate rationalisation as more time is required by the GoM for a comprehensive study.

Popcorn to attract 5-18% tax

Popcorn with salt and spices (if unpackaged) will attract 5 per cent GST, pre-packaged popcorn will have a 12 per cent GST rate, and caramel-coated popcorn will be taxed at 18 per cent.

The GST Council later issued a clarification on popcorn taxes. It said that pre-packed and labelled ready-to-eat snacks will attract a 12 per cent tax, whereas an 18 per cent GST will be levied on caramelised popcorn. However, it said that the tax rate on popcorn has not changed, and the Council has agreed that the Central Board of Indirect Taxes and Customs (CBIC) will issue a circular on the current taxes on popcorn.

Also read: GST Council postpones decision on slashing tax on life, health insurance

Used cars and EVs

The Council approved increasing GST on the sale of old and used cars, including smaller petrol/diesel vehicles and electric vehicles, to 18 per cent from the earlier 12 per cent.

Sitharaman stated that new electric vehicles (EVs) are taxed at 5 per cent GST. For old EVs sold between individuals, there is no GST. However, if a company sells used EVs or petrol and diesel vehicles, the GST rate on the margin has been increased to 18 per cent by the Council.

Calamity cess

The GST Council has agreed to form a GoM, including representatives from West Bengal, Uttar Pradesh, Andhra Pradesh and other states to determine the procedure and system for implementing a 1 percent calamity cess on certain goods and services. This cess will help states recover from natural disasters.

Also read: GST Council to form GoM to review Andhra's 1% calamity cess demand

Among other decisions, the Council decided to standardise the GST rate on fortified rice kernels to 5 per cent down from the previous 18 per cent, regardless of end use. ACC blocks containing more than 50 per cent fly ash will now attract 12 per cent GST, down from 18 per cent.

No decision on food delivery apps

Food delivery by e-commerce and quick commerce -- taxation for delivery and taxation for food was deliberated. However, GST Council has not taken any decision on this. It has been deferred and the GoM will deliberate on this once again.

There was no discussion or mention of gaming-related issues. Despite being a topic of interest in previous discussions, gaming was not included in the agenda or deliberations this time, said Sitharaman.