The reduction of GST rates on life and medical insurance was a key demand from the industry.
GST on term life insurance premiums, and premium paid by senior citizens for health cover is likely to be exempted from tax
Goods and services tax (GST) on term life insurance premiums, and premiums paid by senior citizens for health cover are likely to be exempted from tax, an official said on Saturday.
GoM Recommends GST Exemption
The GoM to decide on the GST rate on life and health insurance met on Saturday and decided to exempt GST on premiums paid for health insurance with coverage of Rs 5 lakh for individuals other than senior citizens.
Final Decision Awaited from the GST Council
The final decision in this regard will be taken by the GST Council Officials premiums paid for health insurance coverage of above Rs 5 lakh will continue to attract 18 per cent GST.
Current GST Rate on Insurance Premiums
Currently, 18 per cent GST is levied on life insurance premiums paid for term policies and family floater policies.
GoM in Favor of Reducing Insurance Premium Rates
”GoM members are broadly on board for cutting my rates on insurance premiums. A final decision will be taken by the GST Council,” an official said.
Focus on Providing Relief to Senior Citizens
Bihar Deputy Chief Minister Samrat Chaudhary said, “Every GoM member wants to give relief to people. Special focus be on senior citizens. We will submit a report to the council. A final decision will be taken by the council”.
GST Exemption Likely for Senior Citizens’ Insurance Premiums
However, there might be no GST on insurance premiums paid for senior citizens, irrespective of the coverage amount.
GoM Set Up to Review Tax on Insurance Premiums
The GST Council in its meeting last month had decided to set up a 13-member GoM to decide on tax on health and life insurance premiums.
Report Expected by October-End
Choudhary is the convenor of the GoM. The panel includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
The GoM has been mandated to submit its report to the Council by October.
The next GST Council meeting is likely to happen in November 2024.
