• India's tax panel has rejected the proposal to include aviation fuel under the Goods and Services Tax (GST) regime.
• The panel also decided to impose an 18% GST on all used or old vehicles sold by registered sellers.
• The GST Council cut the tax rate on fortified rice kernels used for public distribution from 18% to 5%.
• Communications Minister Jyotiraditya Scindia emphasized that the deployment of Artificial Intelligence (AI) must be guided by ethical considerations and a robust regulatory framework.

In a significant development, the Indian government's tax panel has rejected a proposal by the airline industry to bring aviation fuel under the unified Goods and Services Tax (GST) regime. The decision was announced by Finance Minister Nirmala Sitharaman following a meeting of the panel. Currently, state governments have the discretion to tax aviation turbine fuel (ATF), and airlines have been lobbying for its inclusion in the GST regime to ensure a uniform levy nationwide. However, state authorities have opposed this move, fearing potential revenue losses.

States do not want ATF to be brought under GST just like petrol and diesel, Sitharaman stated after the meeting of the GST Council, which she chairs and includes representatives from state governments. The tax panel also decided to impose an 18% GST on all used or old vehicles, including electric vehicles, sold by registered sellers. However, vehicles sold directly between two individuals will not attract tax.

The panel deferred plans to reduce taxes on some life and health insurance premiums, a move seen as crucial to encouraging more Indians to sign up for coverage. Sitharaman said these proposals required further discussion. This decision comes amid expectations of tax relief on health insurance premiums and higher levies on luxury items.

GST Council's Decisions and Their Implications

In related news, the panel, headed by Sitharaman and comprising representatives from all states and union territories, clarified that pre-packed and spiced popcorn would attract a 12% tax rate, while a 5% rate would be levied on unpacked and unlabeled ones. The GST Council also cut the tax rate on fortified rice kernels used for public distribution from 18% to 5%. The Finance Minister clarified that ACC blocks containing 50% fly ash would attract a 12% GST rate. She also stated that black pepper and raisins supplied directly by farmers would be exempt from GST.

In another development, the People's Democratic Party (PDP) president Mehbooba Mufti criticized the proposed increase in GST for Kashmiri shawl, stating that it would destroy the craft. She appealed to Jammu and Kashmir Chief Minister Omar Abdullah to address the issue. Mufti also alleged that the Centre was trying to make the people of Jammu and Kashmir dependent solely on tourism.

Meanwhile, Swiss companies such as the engineering group ABB and transport firm Kuehne Nagel are investing more in India. A $100 billion regional trade deal is expected to further open up the nation to businesses long geared towards China. India's appeal has reflected a broader shift among businesses in Europe eager to balance the costs of a US-China trade spat and recognize that the Chinese economy is losing steam compared to India.

AI Deployment and Ethical Considerations

In the technology sector, Communications Minister Jyotiraditya Scindia asserted that the deployment of Artificial Intelligence (AI) must be guided by ethical considerations and a robust regulatory framework. He emphasized that governance of AI and the Internet of Things (IoT) cannot be an afterthought and added that concerns of privacy and bias must be addressed to ensure that these technologies serve as a force for good.