New Delhi, Oct 6: The Goods and Services Tax (GST) Council is scheduled to meet on October 8 to consider a range of proposals covering tax rates, exemptions, compliance issues and Input Tax Credit (ITC), with measures affecting online food delivery, healthcare, defence, shipping and agriculture likely to figure on the agenda, according media report.
One of the key proposals under consideration is bringing delivery charges levied by e-commerce and food delivery platforms such as Swiggy and Zomato under a uniform 5 per cent GST rate. At present, food supplied through these platforms attracts 5 per cent GST, while the delivery fee charged separately to consumers is subject to 18 per cent GST.
If approved, the proposed change would bring delivery charges under the lower tax rate and create a uniform treatment for goods delivery services. The move could also simplify the tax structure for platforms and consumers.
According to report, the Council is also expected to examine proposals concerning Input Tax Credit for hotels, fitness centres and restaurants that pay GST at the 5 per cent rate. The proposal seeks to address the treatment of input costs for businesses operating under the concessional tax regime.
For electric mobility, the Council is likely to consider two alternative GST structures for transport and rental services. One option is a 5 per cent GST rate with restricted ITC, while the other proposes an 18 per cent rate with full ITC. There may be limited relief for some consumer and travel-related services. GST on air and water purifiers is expected to remain at 18 per cent, while cruise tourism is also unlikely to receive an immediate tax-rate reduction.
The Council is expected to consider expanding GST exemptions for certain healthcare products, with seven additional rare diseases likely to be added to the existing list of treatments and medicines eligible for relief. In defence, IGST exemptions are likely to be considered for imports and supplies of missile components, spares and testing equipment. The proposal is aimed at supporting defence procurement and domestic production, report said.
The report added that this agenda may also include a full GST exemption for warehousing and storage services related to seeds. The measure is expected to reduce storage-related costs and support the agricultural supply chain.
The report stated that council is also expected to address GST-related issues involving financial services. One proposal concerns co-lending arrangements between banks and non-banking financial companies (NBFCs), with the Council likely to clarify the tax treatment of service fees and interest-sharing arrangements.
The GST treatment of investor-awareness programmes conducted by asset management companies (AMCs) is also expected to be considered, with the existing tax treatment likely to continue.
As per report, in the shipping sector, certain services provided to foreign shipping lines may be considered for IGST exemption. The proposal could address tax-related issues involving international shipping operations in Indian waters. Services provided by the Seamen’s Provident Fund Organisation (SPFO) may also be exempted from GST, bringing their treatment in line with services provided by the Employees’ Provident Fund Organisation (EPFO).
The recommendations finalised by the fitment committee will be presented to the Union finance minister and state finance ministers at the October 8 meeting. Any approved changes are expected to be followed by formal notifications. (BVI)
