GST Council Weighs Broad Relief Covering Farm Inputs, ITC on Insurance, and Platform Delivery Taxes — October 5, 2026

The Goods and Services Tax (GST) Council has lined up an expansive agenda aimed at eliminating tax distortions, lowering operational burdens on agriculture, and unlocking input tax credit (ITC) across crucial corporate sectors. The sweeping set of proposals marks a focused effort to resolve legacy ambiguities, provide parity for sustainable mobility, and streamline compliance for micro, small, and medium enterprises (MSMEs) as well as consumer platforms.

Targeted Relief for Agriculture and Farm Inputs

The Council’s agenda places significant emphasis on rural and agrarian economics by addressing tax burdens across primary processing, inputs, and machinery maintenance:

• Seed Storage Services: Storage and warehousing services for sowing seeds are proposed to be exempted from the prevailing 18% GST rate, ensuring lower seed costs for farmers.
• Coffee Curing: Curing of coffee supplied directly to farmers is slated for full exemption from the current 5% levy, classifying it squarely under agricultural cultivator relief.
• Bio-stimulants: Seaweed-based bio-stimulants, registered under the Fertiliser (Control) Order, are set to be taxed uniformly at 5% instead of 18%, bringing parity with standard fertilisers.
• Psyllium Seeds (Isabgol): Dried psyllium seeds will move from a 5% GST bracket to a nil rate, shielding smallholder farmers who cultivate the crop.
• Retreaded Tractor Tyres: Tax on retreaded tractor tyres is proposed to drop from 18% to 5%, aligning them with new tractor tyres and directly benefiting small farmers who rely on retreading.

E-Commerce, Platform Logistics, and EV Mobility

With the rapid expansion of quick-commerce and gig platforms, the Council is evaluating specific taxation frameworks to streamline compliance in last-mile services:

• Platform-Based Goods Delivery: Delivery services provided through aggregators and app-based platforms are proposed to attract a simplified 5% GST levy without input tax credit.
• Electric Vehicle (EV) Fleet Operators: To bridge the disparity with internal combustion engine (ICE) transport services, EV passenger operators may be given an option to choose between a 5% GST levy with restricted ITC or an 18% GST rate with full ITC.

Unlocking Corporate ITC: FMCG, Pharma, Telecom, and Insurance

Corporate India stands to gain significant liquidity from the proposed dismantling of restrictions under Section 17(5) of the Central GST Act:

• Group Insurance: Input tax credit on employer-provided group health and group term life insurance is proposed to be allowed, while individual retail policies remain exempt, potentially releasing substantial working capital for corporate balance sheets.
• Capital Infrastructure: Telecom operators and industrial manufacturers are set to benefit from proposals permitting ITC on telecom towers—treating them as plant equipment rather than immovable property—as well as industrial pipelines laid outside factory premises.
• Free Samples and Expired Stock: In a decisive move benefiting FMCG and pharmaceutical companies, input tax credit will be permitted on inputs used for manufacturing physician samples and promotional stock, as well as goods destroyed due to statutory expiry mandates.

Healthcare Exemptions and Litigation Thresholds

Addressing critical healthcare needs, the agenda includes adding seven more rare diseases to the exemption list, removing import duties and GST on personal imports of life-saving medicines and Food for Special Medical Purposes (FSMP).

To curb routine harassment and reduce administrative friction, the GST Council is also deliberating a minimum monetary floor of ₹10,000 for issuing Show Cause Notices (SCNs) under Sections 73, 74, and 74A of the CGST Act. The move will prevent tax field formations from clogging tribunals and judicial courts with frivolous, small-ticket assessments, allowing both tax authorities and businesses to focus on material compliance.

Tags: GST Council Central Board of Indirect Taxes and Customs FMCG Sector Pharmaceutical Sector Telecommunications Electric Vehicles