Union Finance Minister Nirmala Sitharaman He is likely to meet his state counterparts on December 21-22 for pre-budget consultations and the GST Council meeting, an official said.

The meeting is important as state finance ministers will present their recommendations for 2025-26 Budget It will be introduced on February 1, 2025.

The 55th GST Council meeting will be held on one of these two days, where the much-awaited decision on exemptions or lower rates will be made. GST Health and life insurance tariff will be charged.

The council could also undertake some rationalization work and reduce tax rates on a range of common items from 12% to 5%, in line with recommendations from a panel of state ministers.

The two-day meeting is planned to be held in Rajasthan, either in Jaisalmer or Jodhpur, the official added.

Last month, the group of ministers (GoM) on health and life insurance GST generally agreed that insurance premiums paid for term life insurance policies and health insurance of senior citizens should be exempt from GST.

It has also been proposed to exempt GST on premiums paid for health insurance with coverage up to Rs 5 lakh by individuals other than senior citizens. However, 18% GST will continue on premiums paid for policies with health insurance cover exceeding Rs 5 lakh.

The GST Council, in its 54th meeting on September 9, had tasked the Government to complete the report on GST tax on insurance by the end of October.

Separately, on rationalization of GST rates, the GoM also suggested that the GST Council withdraw tax rates on a number of products, including packaged drinking water, bicycles, exercise books, luxury wristwatches and shoes. This rate rejig is expected to generate revenue gains of approximately Rs 22,000 billion.

Regarding rationalization of rates, the GoM has suggested reducing the GST on packaged drinking water of 20 liters and above from 18% to 5%. If the GoM’s recommendation is accepted by the GST Council, GST on bicycles costing less than Rs 10,000 will be reduced from 12% to 5%.

Additionally, GST on exercise books will be reduced from 12 percent to 5 percent. The government has also proposed increasing GST on shoes priced above Rs 15,000 per pair from 18% to 28%. He also suggested increasing the GST on wristwatches priced above Rs 25,000 from 18% to 28%.

Bihar Deputy Chief Minister Samrat Chaudhary is the convener of the 13-member Government Govt on health and life insurance and the 6-member Govt Govt on rates rationalization.

Currently, GST is a four-tier tax structure with slabs of 5%, 12%, 18% and 28%. Under GST, essential goods are either exempted or taxed in the lowest bracket, while luxury and defective goods are in the highest bracket. Luxury and sin goods attract interest from the top 28 percent. The average GST rate has fallen below the revenue neutral rate of 15.3%, giving rise to the need to initiate discussions on rationalization of the GST rate.