The GST Council on Sunday formed a 13-member Group of Ministers (GoM) to recommend changes to the Goods and Services Tax (GST) rates on health and life insurance premiums. Bihar Deputy Chief Minister Samrat Choudhary will lead the panel, which includes members from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, and other states. The panel is expected to submit its report by October 30, 2024.
This decision was taken during the 54th GST Council meeting on September 9, where the need to examine the current GST structure on insurance premiums was discussed. Currently, a GST rate of 18% is levied on both health and life insurance premiums.
The GoM's Terms of Reference include suggesting GST rates for various types of health insurance, such as individual, group, and family floater plans, as well as insurance plans for senior citizens and individuals with mental illness. Additionally, the panel will review tax rates for different life insurance products, including term insurance and life insurance with investment plans, and re-insurance.
Opposition-ruled states like West Bengal have pushed for a complete GST exemption on health and life insurance premiums, while others have proposed lowering the rate to 5%. Even Union Transport Minister Nitin Gadkari has advocated for a reduction, arguing that taxing life insurance premiums equates to taxing life's uncertainties.
In 2023-24, the government collected Rs 8,262.94 crore in GST from health insurance premiums and Rs 1,484.36 crore from reinsurance premiums. Finance Minister Nirmala Sitharaman, during the August discussion on the Finance Bill, encouraged Opposition members to bring their proposals on GST relief to the GST Council.
A final decision on the revised GST rates for insurance premiums is expected in the next GST Council meeting in November, following the submission of the GoM’s recommendations.
Official Notification has been attached
CAclubindia
