According to officials, the Goods & Services Tax (GST) Council delayed its decision on Saturday to lower the tax rate on health and life insurance premiums. The Group of Ministers (GoM) was tasked with further deliberations after the 55th meeting of the GST Council, which was led by Union Finance Minister Nirmala Sitharaman and included her state counterparts, determined that some more technicalities needed to be worked out.
In order to make a decision regarding the taxation of group, individual, and senior citizen policies, Bihar deputy chief minister Samrat Chaudhary stated that the GoM on insurance needs to hold another meeting. “Some members said more discussions required. We [GoM] will meet in January again,” Chaudhary told reporters.
At its November meeting, a GOM established by the GST Council under Chaudhary decided to exempt term life insurance premiums from GST.
It has also been suggested that older persons’ health insurance premiums be free from taxes. Additionally, it has been suggested that premiums for health insurance up to Rs 5 lakh in coverage paid by non-elderly individuals be free from GST.
Nonetheless, premiums for policies with health insurance coverage above Rs 5 lakh will continue to be subject to 18% GST.
