New Delhi: More than a month after a much-appreciated recommendation was made to reduce tax rates of premiums paid for term life insurance policies, the GST Council on Saturday failed to reach a decision on its implementation.
During the 55th meeting of the council, a decision on reducing tax rates on premiums for life and health insurance premiums was deferred because of technical considerations, PTI quoted officials as saying.
The council tasked the Group of Ministers (GoM) to conduct further deliberations.
The meeting, chaired by Union Finance Minister Nirmala Sitharaman, concluded that further discussions were needed before finalising any change.
Bihar Deputy Chief Minister Samrat Chaudhary, who heads the GoM on insurance, said that more time is required to resolve outstanding issues, particularly regarding taxation of group policies, individual policies, and senior citizens’ plans.
The next GoM meeting has been scheduled in January to finalise outstanding issues.
In November, the GoM had recommended certain reforms, including exempting premiums paid for term life insurance policies from GST.
Health insurance premiums paid by senior citizens were also proposed for exemption, alongside those up to Rs 5 lakh for non-senior citizens, while premiums exceeding Rs 5 lakh will continue to be taxed at 18%.
There are varying opinions in different states about the proposed changes, hence the need for further technical assessment.
