GST Reduction Likely to Make Health & Life Insurance Cheaper

Ira Singh
Khabar Khabaron Ki,23 Oct’24

A reduction in Goods and Services Tax (GST) could make insurance more affordable for customers, according to sources,this follows ongoing discussions within a Group of Ministers (GoM), convened to evaluate exemptions on GST for term life and health insurance premiums.
As per information, the GoM, which met last Saturday, is considering exempting GST on health insurance premiums for policies up to Rs5 lakh, specifically for individuals other than senior citizens. For coverage above Rs5 lakh, the current 18% GST would remain applicable. Presently, an 18% GST is levied on premiums for term life and family floater policies.An official reportedly stated that GoM members are largely in favor of reducing GST on insurance premiums, with a final decision to be taken by the GST Council.
Bihar Deputy Chief Minister Samrat Chaudhary, the GoM’s convenor, emphasized that providing relief to senior citizens is a priority, indicating that premiums paid by senior citizens might be exempt from GST regardless of the coverage amount.
The GoM, established by the GST Council last month, consists of 13 members, including ministers from states like Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, and others. The panel has been tasked with submitting its report to the GST Council by October-end. The Council will then finalize any changes to the GST rates on insurance premiums.