GST Council Decides on Key Issues, Raises Rate on Used EV Sales

New Delhi: The Goods and Services Tax (GST) Council in its 55th meeting decided to levy an 18 per cent GST on margin value on the sale of used electric vehicles by businesses. According to Union Finance Minister Nirmala Sitharaman, the rate will be applied only on the difference between the purchase price and selling price of the vehicle.

However, sale and purchase of used vehicles by individuals will continue to remain exempt from GST. The Council also decided not to include jet fuel (ATF) in the 'one-nation-one-tax' regime, a stance that several states have been advocating for since the introduction of GST.

On health insurance products, the Council did not take decisions on reducing the tax rate, citing a need for more work and comments from sector regulators. The group of ministers examining the issue had recommended exempting life insurance premiums from GST, but no final decision was taken in this regard.

In other news, the Council cut the tax rate on fortified rice kernels used for public distribution to 5 per cent from 18 per cent, citing a need to simplify rules. They also decided to regulate issues related to 'as is where is' basis by providing more clarity.

Additionally, the Council set up a Group of Ministers (GoM) to mull over allowing states to levy cess under GST to overcome financial distress after natural calamities. Finance ministers from Uttar Pradesh, Telangana, and West Bengal will be part of this GoM.

The Council also discussed levying tax on food delivery charges by quick commerce platforms, which was deferred indefinitely.