The GST Council has postponed its decision on whether to reduce the Goods and Services Tax (GST) on health insurance premiums. In their 54th meeting on Monday, the Council decided to defer any action on changing the tax rate for health and life insurance premiums. The issue will be revisited in the next Council meeting.
The Fitment Committee, made up of central and state tax officials, presented a report on the implications of reducing GST on life, health, and reinsurance premiums. While a broad consensus on reducing GST rates for health and life insurance was noted, the specifics of the reduction will be determined in the upcoming meeting.
Currently, GST on health and life insurance premiums is set at 18 percent. The insurance industry had anticipated a possible reduction to alleviate the financial burden on policyholders. Speculation had also suggested that the rate could be reduced to zero percent, but no concrete decision was made at this meeting.
In addition to the insurance tax rates, the Council is expected to discuss other financial matters in future meetings, including the potential taxation of online payments exceeding Rs 2,000. Presently, online transactions through payment gateways are not subject to GST.
West Bengal Finance Minister Chandrima Bhattacharya had requested a reduction in the 18 percent GST rate for life and health insurance premiums. Bihar Deputy Chief Minister Samrat Chaudhary, who leads the Group of Ministers on GST rate rationalization, confirmed that changes to health insurance tax rates are under review.
The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state finance ministers, will continue to evaluate these issues and provide updates on any decisions made.
How the 54th GST Council Meeting Aims to Address Key Tax Issues
54th GST Council Meeting Scheduled for September 9, 2024: Check Key Highlights
States Cautious on GST Rate Cuts, Says Finance Minister Sitharaman