GST Council forms GoM to review tax rate on insurance; report by Oct 30

GST Council forms GoM to review tax rate on insurance; report by Oct 30 | Finance News

Last updated: 2024/09/15 at 5:02 PM

GST | (Photo: Shutterstock)

2 min read Last Updated : Sep 15 2024 | 7:55 PM IST

The GST Council on Sunday constituted a 13-member Group of Ministers (GoM) to suggest GST rate on premiums of various health and life insurance products and submit its report by October 30.

Bihar Deputy Chief Minister Samrat Choudhary is the convenor of the GoM. The members of the panel include members from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.

The 54th GST Council meeting on September 9 decided to set up a GoM to examine and review the present tax structure of GST on life and medical insurance. A final call by the Council on the taxation of insurance premiums is likely to be taken in the next meeting in November based on the GoM report.

Currently, 18 per cent of Goods and Services Tax (GST) is levied on insurance premiums.

The Terms of Reference (ToR) of the panel also include suggesting tax rate of health/medical insurance including individual, group, family floater and other medical insurance for various categories like senior citizens, middle class, persons with mental illness. Also, suggest tax rates on life insurance, including term insurance, life insurance with investment plans whether individual or group and re-insurance.

“The GoM is to submit its report by October 30,” 2024,” said the Office Memorandum issued by the GST Council Secretariat on the Constitution of GoM on Life and Health insurance.

Some opposition-ruled states, including West Bengal, had demanded complete exemption of GST on health and life insurance premiums, while some other states were in favour of lowering the tax to 5 per cent. Even Transport Minister Nitin Gadkari had in July written to Finance Miniter Nirmala Sitharaman on the issue saying “levying GST on life insurance premium amounts to levying tax on the uncertainties of life.”

In 2023-24, the centre and states collected Rs 8,262.94 crore through GST on health insurance premiums, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premiums.

Sitharaman in her reply to a discussion on the Finance Bill in the Lok Sabha in August had said that 75 per cent of the GST collected goes to states and the Opposition members should ask their state finance ministers to bring the proposal to the GST Council.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 15 2024 | 7:55 PM IST

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