GST Council postpones decision on slashing tax on life, health insurance

A GOM set up by the Council under Mr. Chaudhary, in its meeting in November had agreed on exempting insurance premiums paid for term life insurance policies from GST. File
| Photo Credit: The Hindu

“The Goods and Services Tax (GST) Council on Saturday (December 21, 2024) postponed a decision on cutting tax rate on life and health insurance premiums,” officials said.

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The 55^th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising State counterparts, decided that some more technicalities needed to be ironed out and tasked the Group of Ministers (GoM) for further deliberations.

Bihar Deputy Chief Minister Samrat Chaudhary said one more meeting of the GoM on insurance is required to take a call on taxation of group, individual, senior citizens’ policies.

“Some members said more discussions required. We (GoM) will meet in January again,” Mr. Chaudhary told reporters.

A GOM set up by the Council under Mr. Chaudhary, in its meeting in November had agreed on exempting insurance premiums paid for term life insurance policies from GST. Also premium paid by senior citizens towards health insurance cover has been proposed to be exempted from the tax.

Besides, premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to ₹5 lakh is proposed to be exempted from GST. However, 18% GST will continue on premiums paid for policies with health insurance cover of more than ₹5 lakh.