GST Council yet to take decision to cut taxes on health, life insurance policies

The Goods and Services Tax (GST) Council deferred its decision on reducing tax rates for life and health insurance premiums during its meeting on Saturday, officials reported.

The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman and attended by state finance ministers, concluded that additional technical clarifications are needed. The council has tasked the Group of Ministers (GoM) with further deliberations on the matter.

Bihar Deputy Chief Minister Samrat Chaudhary stated that the GoM would need to hold another meeting to finalize the taxation framework for group, individual, and senior citizen insurance policies.

“Some members suggested more discussions were necessary. The GoM will reconvene in January,” Chaudhary told reporters.

The GoM, which had met in November under Chaudhary’s leadership, proposed exempting GST on premiums for term life insurance policies.

It also suggested exempting health insurance premiums paid by senior citizens. Additionally, premiums for health insurance policies covering up to Rs 5 lakh for individuals other than senior citizens were proposed to be GST-free.

However, the 18% GST on premiums for health insurance policies with coverage exceeding Rs 5 lakh will remain unchanged.