Union Transport Minister Nitin Gadkari had also written a letter to Finance Minister Nirmala Sitharaman on this issue in July, saying that imposing GST on life insurance premium is like imposing tax on the uncertainties of life.
The first meeting of the Group of Ministers will be held on October 19 to decide on reducing the Goods and Services Tax (GST) on health and life insurance premiums. Top officials gave this information on Thursday. Currently, 18 percent GST is levied on insurance premiums and there is a demand for exemption or reduction in the tax. The GST Council in its meeting earlier this month decided to form a 13-member Group of Ministers to decide on tax on health and life insurance premiums.
The Deputy Chief Minister of Bihar is the coordinator
According to the news, Bihar Deputy Chief Minister Samrat Chaudhary is the convener of the Group of Ministers. The group includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana. The Group of Ministers has been directed to submit its report to the Council by the end of October. Based on the report of the Group of Ministers, the Council is likely to take a final decision on taxation on insurance premium in its next meeting in November. The official said that the meeting of the GoM on GST on insurance will be held in Delhi on October 19.
Suggestions will be given on these too
The terms of reference (TOR) of the panel also includes suggesting tax rate of health/medical insurance including individual, group, family floater and other medical insurance for various categories such as senior citizens, middle class, persons with mental illness. The TOR also includes suggesting tax rates on life insurance including term insurance, life insurance with investment plans, whether individual or group and reinsurance. Some opposition-ruled states, including West Bengal, had demanded complete exemption from GST on health and life insurance premiums, while some other states were in favour of reducing the tax to 5 per cent.
Even Union Transport Minister Nitin Gadkari had written to Finance Minister Nirmala Sitharaman on the issue in July, saying that levying GST on life insurance premium is akin to taxing the uncertainties of life.
This much amount was deposited through GST
In the financial year 2023-24, the Center and the states collected Rs 8,262 crore. Rs 94 crore was received through GST on health insurance premium, while Rs 1,484.36 crore was collected due to GST on health reinsurance premium. Responding to the discussion on the Finance Bill in the Lok Sabha in August, Sitharaman had said that 75 per cent of the GST collected goes to the states and opposition members should ask their state finance ministers to bring a proposal in the GST Council.
