Quick Summary
The government is working on a sweeping Goods and Services Tax (GST 2.0) blueprint, which could see insurance premiums taxed at just 5% or even zero, compared to the current 18%, according to areport citing official sources. The move is aimed at making insurance more affordable and reducing the financial burden on households. Following the news, insurance company stocks surged up to 5%, reflecting investor optimism over the potential tax relief. Major Overhaul of GST Structure Under the pro
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FAQ :
The government is considering reducing the Goods and Services Tax (GST) on insurance premiums from the current 18% to either 5% or 0% as part of a GST 2.0 overhaul.
The aim is to make insurance more affordable and reduce the financial burden on households.
The proposed GST 2.0 framework plans to simplify the tax structure into two main slabs: 5% and 18%, along with a special 40% slab for luxury and sin goods. The current 12% and 28% slabs are likely to be phased out.
Essential items like food, medicines, and daily-use products are expected to remain exempt or taxed at 5%. Middle-class consumption goods such as TVs and refrigerators are likely to be under the 18% slab.
Yes, the government has proposed a 40% 'sin tax' for alcohol and tobacco, limited to a small set of products, while ensuring the overall tax incidence on tobacco remains at 88%.
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