Insurance
The GST Council on Sunday constituted a 13-member Group of Ministers (GoM) to suggest GST rates on premiums of various health and life insurance products and submit its report by October 30. Bihar Deputy Chief Minister Samrat Choudhary is the convener of the Group of Ministers. The members of this group include members from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana. In the 54th meeting of the GST Council held on September 9, it was decided to constitute a Group of Ministers to examine and review the existing tax structure of GST on life and medical insurance. The final decision by the Council regarding taxation on insurance premium is likely to be taken based on the report of the Group of Ministers in its next meeting in November.
Currently, GST on insurance premium is 18%
Currently, 18 per cent Goods and Services Tax (GST) is levied on insurance premium. The panel’s terms of reference (TOR) also includes suggesting tax rates on health/medical insurance including individual, group, family floater and other medical insurance for various categories such as senior citizens, middle class, persons with mental illness, etc. Also, suggesting tax rates on life insurance including term insurance, life insurance with investment plans (whether individual or group) and reinsurance.
Report has to be submitted by October 30, 2024
The office memorandum issued by the GST Council Secretariat on the formation of the GoM on life and health insurance said, “The GoM is to submit its report by October 30, 2024.” Some opposition-ruled states, including West Bengal, had demanded complete exemption from GST on health and life insurance premiums, while some other states were in favour of reducing the tax to five per cent. Even Transport Minister Nitin Gadkari had written to Finance Minister Nirmala Sitharaman on the issue in July, saying “levying GST on life insurance premium is akin to taxing the uncertainties of life.”
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