Quick Summary
Finance Minister Nirmala Sitharaman has suggested that a reduction in the GST on life and health insurance premiums could lead to lower costs for policyholders. In response to a question in the Lok Sabha, she revealed that the GST Council had recommended the formation of a Group of Ministers (GoM) during its September 9 meeting to thoroughly review the current GST framework on life and health insurance policies. The matter remains under active examination, with any potential changes set to be
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FAQ :
Finance Minister Nirmala Sitharaman has suggested that a reduction in the GST on life and health insurance premiums could lead to lower costs for policyholders.
Potential changes to the GST on insurance are set to be discussed at the upcoming GST Council meeting on December 21.
Currently, life and health insurance premiums are taxed at an 18% GST rate.
The Group of Ministers has reportedly recommended changes including GST exemptions for term life insurance policies and health insurance plans for senior citizens. They are also considering exempting health insurance premiums for individuals with coverage below Rs 5 lakh.
A GST reduction would directly benefit consumers by lowering insurance costs, as competitive market conditions would likely lead insurers to pass on the savings.
In the 2023-24 fiscal year, GST collections from life and health insurance premiums amounted to Rs 16,398 crore.
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