CM Majhi Bats for Rate Rationalisation, Insurance Exemption at GST Council Meet

New Delhi: Odisha Chief Minister on Thursday supported the rate rationalisation proposals put forward by the Group of Ministers (GoM) during the 56th GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman.

He said the move would ease compliance, reduce business costs, and simplify India’s tax system. He added that the exemption of life and health insurance from GST would make policies more affordable for middle- and lower-income groups and help increase insurance coverage in the country.

On the issue of Compensation Cess, the Chief Minister welcomed the proposal to merge items under the cess into the GST framework. He suggested that any surplus should be shared equally between the Centre and States, and within States, distributed according to their GST revenue share based on the base year formula. He also proposed setting October 31, 2025, as the date to abolish the cess.

The Chief Minister pointed out that reducing GST on Kendu leaves from 18% to 5% would directly help tribal communities involved in their collection, leading to higher incomes through government procurement and private sales.

He also highlighted that the proposed tax cuts on agricultural inputs and machinery would lower costs for farmers, boost rural incomes, and support food security, while reductions in the pharma sector would make essential medicines more affordable.

Expressing support for the Law Committee’s recommendations, he backed the simplified GST registration scheme for small traders, start-ups, and self-employed individuals. According to him, this would save time, reduce compliance costs, and encourage more businesses to join the formal economy.