NEW DELHI: The GST Council on Sunday formed a 13-member Group of Ministers (GoM) to recommend GST rates for premiums of health and life insurance products and to submit its report by October 30.
The GoM, convened by Bihar Deputy Chief Minister Samrat Choudhary, comprises members from several states, including Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
The decision to establish the GoM was made during the 54th GST Council meeting on September 9, with the aim of examining and reviewing the current GST structure on life and medical insurance. The Council is expected to make a final decision on insurance premium taxation during its next meeting in November, based on the GoM's recommendations.
Currently, insurance premiums are subject to an 18 per cent Goods and Services Tax (GST).
The GoM's Terms of Reference (ToR) include proposing tax rates for various categories of health/medical insurance, such as individual, group, family floater, and other medical insurance for senior citizens, middle class, and persons with mental illness. Additionally, the panel is tasked with suggesting tax rates for life insurance, including term insurance, life insurance with investment plans (both individual and group), and re-insurance.
"The GoM is to submit its report by October 30," 2024," according to the office memorandum issued by the GST Council secretariat regarding the formation of the GoM on Life and Health insurance .
Several states had called for a complete exemption of GST on health and life insurance premiums. Some states, however, supported reducing the tax rate to 5 per cent instead. Even Transport minister Nitin Gadkari had expressed his concerns to finance minister Nirmala Sitharaman in July, stating that "levying GST on life insurance premium amounts to levying tax on the uncertainties of life."
In the fiscal year 2023-24, the central and state governments collected a total of Rs 8,262.94 crore through GST on health insurance premiums. Additionally, Rs 1,484.36 crore was collected as GST on health reinsurance premiums.
During a discussion on the Finance Bill in the Lok Sabha in August, Sitharaman pointed out that 75 per cent of the GST collected is distributed to the states. She suggested that opposition members should approach their respective state finance ministers to bring the proposal before the GST Council for consideration.
The GoM, convened by Bihar Deputy Chief Minister Samrat Choudhary, comprises members from several states, including Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
The decision to establish the GoM was made during the 54th GST Council meeting on September 9, with the aim of examining and reviewing the current GST structure on life and medical insurance. The Council is expected to make a final decision on insurance premium taxation during its next meeting in November, based on the GoM's recommendations.
Currently, insurance premiums are subject to an 18 per cent Goods and Services Tax (GST).
The GoM's Terms of Reference (ToR) include proposing tax rates for various categories of health/medical insurance, such as individual, group, family floater, and other medical insurance for senior citizens, middle class, and persons with mental illness. Additionally, the panel is tasked with suggesting tax rates for life insurance, including term insurance, life insurance with investment plans (both individual and group), and re-insurance.
"The GoM is to submit its report by October 30," 2024," according to the office memorandum issued by the GST Council secretariat regarding the formation of the GoM on Life and Health insurance .
Several states had called for a complete exemption of GST on health and life insurance premiums. Some states, however, supported reducing the tax rate to 5 per cent instead. Even Transport minister Nitin Gadkari had expressed his concerns to finance minister Nirmala Sitharaman in July, stating that "levying GST on life insurance premium amounts to levying tax on the uncertainties of life."
In the fiscal year 2023-24, the central and state governments collected a total of Rs 8,262.94 crore through GST on health insurance premiums. Additionally, Rs 1,484.36 crore was collected as GST on health reinsurance premiums.
During a discussion on the Finance Bill in the Lok Sabha in August, Sitharaman pointed out that 75 per cent of the GST collected is distributed to the states. She suggested that opposition members should approach their respective state finance ministers to bring the proposal before the GST Council for consideration.
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