New Delhi: A Group of Ministers (GoM) deliberated on the Central government’s proposal to completely remove goods and services tax (GST) on life and health insurance premiums for individuals.
The current rate on life and health insurance premiums is a hefty 18 per cent.
“The Centre’s proposal is clear that the insurance sector’s individual and family (policies) should be exempt from GST. This has been discussed and the GoM report will be presented to the (GST) Council,” convenor of insurance GoM Samrat Choudhary said on Wednesday.
The report of the 13-member GoM will include views and concerns expressed by some state finance ministers.
“All members have given their approval for lowering rates. Some states have given their own views,” Choudhary said.
A final call on insurance premium rates will be taken by the GST Council.
The proposal on insurance premium is part of the overall GST reform proposal under which goods and services tax will be levied at two rates — 5 and 18 per cent.
The GoM on health and life insurance was set up in September 2024 to suggest tax rates.
The panel — which includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana – will submit its report to the GST Council by the end of October, reported PTI.
In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health insurance premium, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium.
