GST Council meeting: GoM wants to reduce GST rate to 5% on all health insurance services

The 55th meeting of the GST Council, which is scheduled to be held soon, will review and review the current Goods and Services Tax (GST) policy on life insurance and medicine. The Group of Ministers (GoM) on Health Insurance presented its recommendations to finance officials from all the states and central governments on December 16. The report will be reviewed by the GST Council at its meeting in Jaisalmer.

Key requirements:

• Exemption from term life insurance: The GoM has decided not to exempt from GST on regular family insurance policies. This means that these orders will not be subject to GST, reducing the financial burden on the policy holders.
• Exemptions from health insurance for seniors: Another big idea is the exemption of GST on health insurance especially for the elderly, which will help make healthcare affordable for the elderly.
• Reduction of GST rate on private health insurance: The GoM has also proposed to reduce the GST rate on all health insurance to 5 percent, but without the benefit of Input Tax Credit (ITC). This aims to lower the cost of health insurance premiums for individuals and keep the process straightforward.

These proposals, if approved, could have a significant impact on the GST structure for life and health insurance, which would reduce premiums and increase the availability of insurance to more people.

Currently, 18 percent GST on insurance premiums is charged. Sources indicate that the Council is likely to approve a proposal to exempt health and life insurance up to Rs 5 lakh from GST. The goal is to reduce taxes on low and middle income earners. It is also likely to provide similar exemptions for senior citizen policies.

The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, with members from all states and union territories, is scheduled to meet in Jaisalmer on December 21.