The Ministry of Finance, in answer to the query in the Lok Sabha, cited that the government has not taken a final decision on lowering the GST on Life Insurance Corporation (LIC) premiums till now.
But, the problem is under active consideration by a Group of Ministers (GoM) that has been tasked to compute the GST on life and health insurance comprehensively.
Firstly, before the GST Council during its 54th meeting held on September 9, 2024, the issue was placed in New Delhi. The Council, following in-depth deliberations, agreed to form a GoM, chaired by Shri Samrat Choudhary, Deputy Chief Minister of Bihar, to analyse the case holistically.
The GoM in the 55th meeting of the GST Council held on December 21, 2024, in Jaisalmer, asked for more time to finalise its suggestions. The request has been accepted by the council, showing that additional decisions on the case will be established in the forthcoming report via GoM.
Read Also: Centre Transfers Three-Quarters of Health & Life Insurance GST to States
Currently, there is an 18% GST on LIC premiums for most traditional policies, which policyholders and stakeholders are concerned about, claiming a lower tax burden on essential financial protection products.
The GoM’s review result can provide a method for tax relief in the insurance sector, particularly for individual life insurance policyholders.
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