HYDERABAD: Stating that he welcomes the Union government’s proposal to remove the 12% GST slab and reduce tax rates on certain goods and services, Deputy Chief Minister Mallu Bhatti Vikramarka on Wednesday called for a review of higher tax rates on some other items.
“There is a need to examine these proposals in more detail to ensure the benefit is passed on to consumers, while also understanding their impact on state revenues and the compensation mechanism,” he said at a meeting of the Group of Ministers (GoM) on Wednesday.
The GoM, constituted by the GST Council, was tasked with reviewing proposals on exempting life and health insurance services from GST and on rate rationalisation.
Pointing out that a GoM already exists to specifically examine rate rationalisation, Vikramarka suggested that the latest proposals be referred to that panel for detailed study before recommendations are made to the GST Council. He said that proposals relating to compensation cess should also be placed before the same GoM to allow comprehensive recommendations.
The deputy chief minister proposed increasing the membership of the GoM on rate rationalisation to ensure wider representation from states.
The meeting also discussed exempting all individual life and health insurance policies, along with related reinsurance. Vikramarka welcomed the move, saying it would expand insurance penetration, but stressed the need for a mechanism to ensure benefits reach policyholders rather than insurance companies.
“It is only in such a situation that the purpose will be served, though states will lose some revenue that could have been used for welfare schemes,” the deputy chief minister said.
He added that the Telangana government already provides insurance cover to 95 lakh families.