The GST Council, in its 55th meeting held on Saturday, decided to delay reducing the tax rate on premiums for life and health insurance policies.
Officials stated that more technical aspects need to be resolved before a decision can be made. The task has been assigned to a Group of Ministers (GoM) for further discussions.
GoM to Reconvene in January
The meeting, chaired by Union Finance Minister Nirmala Sitharaman and attended by state finance ministers, included a discussion on the taxation of group, individual, and senior citizen insurance policies.
Bihar Deputy Chief Minister Samrat Choudhary, who heads the GoM on Insurance, mentioned that the group would meet again in January to finalize the decision.
“Some members suggested that further discussions are required. We (GoM) will meet again in January,” Choudhary informed reporters.
Proposals for Tax Exemptions on Insurance Premiums
The GoM on Insurance, formed under Choudhary’s leadership, had earlier proposed exemptions on specific insurance premiums.
In a meeting held in November, the GoM agreed to exempt the GST on premiums for term life insurance policies.
Additionally, the proposal includes a GST exemption for premiums paid by senior citizens for health insurance cover.
For individuals other than senior citizens, health insurance premiums up to ₹5 lakh may also be exempted from GST. However, premiums for policies exceeding ₹5 lakh will still attract an 18% GST rate.