NEW DELHI: The Goods and Services Tax (GST) Council, in its recent meeting, established a 13-member Group of Ministers (GoM) to determine the tax treatment of health and life insurance premiums.
According to an official statement on Saturday, GST on term life insurance premiums and premiums paid by senior citizens for health coverage may soon be exempt from tax.
The GoM, which convened on Saturday, discussed exempting GST on premiums for health insurance policies with coverage up to Rs5 lakh for individuals other than senior citizens. The final decision on this matter will rest with the GST Council.
GST on health insurance
Currently, a GST rate of 18 per cent applies to life insurance premiums for term policies and family floater policies. For health insurance coverage above Rs5lakh, the 18 per cent GST rate is expected to remain unchanged.
“GoM members are largely in favor of reducing tax rates on insurance premiums. A final decision will be made by the GST Council,” said an official.
Bihar Deputy Chief Minister Samrat Chaudhary, the GoM convenor, stated, “Every GoM member supports providing relief to the public, especially with a special focus on senior citizens. We will submit a report to the Council, and the final decision will be made by the Council.”
Notably, the GoM is also considering exempting GST on health insurance premiums paid by senior citizens, regardless of the coverage amount.
The GoM, which includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana, has been tasked with submitting its report to the GST Council by the end of October.
