GST Council defers decision on lowering tax on health, life insurance premiums
- GST Council's move enables state finance ministers and officials from the central and state governments to deliberate on these further.
The GST Council on Saturday deferred decisions on a tax rate cut on life and health insurance premiums and a tax rate overhaul meant to raise revenue collection as two ministerial panels decided to deliberate further before recommending changes to the federal indirect tax body, three persons aware of discussions said.
The move enables state finance ministers and officials from the central and state governments to deliberate on these further.
Samrat Chaudhary, deputy chief minister of Bihar and the convenor of the group of ministers (GoM) on insurance, told reporters that the panel had not submitted its recommendations to the council.
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“For the report that was to be given by the GST GoM, many ministers were of the view that one more meeting should happen. Whether it is for group insurance, individual insurance or senior citizens’ insurance, we will do another meeting for it. We will discuss it all in the next meeting,” Chaudhary said.
Chaudhary, who is also the convenor of the ministerial panel on goods and services tax (GST) rate rationalization—an exercise to boost tax revenue by raising rates and fixing tax anomalies—said the panel’s recommendations were not placed before the Council.
A second person, who is also privy to the developments in the council's 55th meeting, said a decision on insurance rate cut had been deferred, and the panel on rate rejig had not submitted its recommendations.
Also Read: GST rate overhaul to face tough review amid tepid urban demand and inflation worries
Mint reported on Saturday that inflation and consumer appetite for purchases are two considerations that were expected to weigh on the council on the issue of further hikes in the indirect tax system.
Queries emailed to the finance ministry and the GST Council seeking comments remained unanswered at the time of publishing this story.
In its November meeting, the GoM proposed exempting premiums for term life insurance from GST, and it recommended exemption for premiums paid by senior citizens for health insurance. It also suggested exempting premiums for health insurance policies with coverage up to ₹5 lakh, but 18% GST would remain on policies with coverage exceeding ₹5 lakh.
Also Read: Mint Quick Edit | Is a GST rate cut for insurance good news?
The 55th GST Council meeting took place in Jaisalmer, Rajasthan.
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Business NewsEconomyGST Council defers decision on lowering tax on health, life insurance premiums
First Published:21 Dec 2024, 01:26 PM IST
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