GST on Insurance Premium: Union Finance Minister Nirmala Sitharaman may hold talks with the finance ministers of the states on December 21-22 for pre-budget discussions and GST Council meeting.
GST Council Meeting: Union Minister Nitin Gadkari had written a letter to Finance Minister Nirmala Sitharaman to remove GST on health insurance. Since then, the discussion on this has intensified. There was also a discussion in the Group of Ministers (GoM) about this in the past few days. Now Union Finance Minister Nirmala Sitharaman can talk to the finance ministers of the states on 21-22 December for discussions and GST Council meeting before the budget. According to the report of Times of India, in this meeting to be held in Rajasthan, consideration can be given to reducing tax on some insurance plans.
18% tax can be abolished completely
The GST Council may completely abolish the 18% tax on term insurance plans in the upcoming meeting. The council will consider abolishing the tax on health insurance for senior citizens and those taking coverage up to Rs 5 lakh. This meeting is also important because in this the finance ministers of the states will present their recommendations for the budget of 2025-26. The next budget will be presented on 1 February 2025. One of these two days will be the 55th meeting of the GST Council, in which the long-pending decision on exemption or lower GST rate on health and life insurance will be taken.
There is little hope of any change in the tax on other things
There is little chance of any change in the GST on other things and services in this meeting of the council. Many states including Kerala and West Bengal are worried about the possible revenue loss if the tax is reduced. Most of the non-NDA ruled states had opposed the reduction of GST slab from 4 to 3 percent. Currently, goods and services are taxed at the rate of 5%, 12%, 18% and 28%. In this, the slabs of 18% and 28% give about three-fourths of the total revenue.
Tax can be reduced from 12 to 5 percent
However, it is also expected that based on the recommendations of the committee of state ministers, the tax rate on some goods can be reduced from 12 percent to 5 percent. The official said that the two-day meeting will be held in Jaisalmer or Jodhpur in Rajasthan. The GoM on Health and Life Insurance had broadly agreed last month to exempt insurance premiums paid for ‘term life insurance’ policies and health insurance of senior citizens from GST.
Finance ministers of these states will be included
The GST Council in one of its meetings had decided to form a 13-member ministerial group to take a decision on tax on health and life insurance premium. The ministerial group was entrusted with the task of finalizing the report on imposing GST on insurance by the end of October. Bihar Deputy Chief Minister Samrat Choudhary is the convener of the ministerial group. It includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.
