The Goods and Services Tax (GST) Council is acknowledging waiving the premiums filed for life and health insurance from GST.
Towards the insurance sector, the GST on term life insurance premiums seems to be waived for all the individuals along with the plans that comprise family members. Senior citizens who pay the health insurance premium irrespective of coverage shall indeed get waived.
For the other citizens, the health insurance has the covering of Rs 5 lakh that may get exempted and there is an 18% rate at present that shall get levied for the health insurance of more than Rs 5 lakh.
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Main Key Facts –
- Health Insurance Exemption: There is a coverage of up to Rs 5 lakh for individuals other than senior citizens that may be waived from GST for the Premiums paid for health insurance.
- GST on Higher Coverage: The premiums for health insurance coverage surpass Rs 5 lakh and will continue to draw an 18% GST.
- Life Insurance: GST on life insurance premiums towards the term policies and family floater policies is 18% at present.
The exemption decision of GST on life and health insurance premiums is still under consideration via the GST council. If it is executed, the same shall furnish relief to policyholders and increase the insurance sector.
GoM members are on board for lessening my rates on insurance premiums. GST council shall opt for a final decision.
The implication of revenue for the exemption proposal towards senior citizens for health insurance is anticipated to be near Rs 2,000 crore and Rs 200 crore on the exemption of term cover premiums.
Bihar Deputy Chief Minister Samrat Chaudhary cited that every GoM member desired to provide relief to the people. The focus is on senior citizens. We shall provide a report to the council. The council will conclude the decision.
No GST might be there on the insurance premiums filed for senior citizens, whatever the coverage amount.
In the meeting of the council held last month, it was determined to set up 13 members of GoM to decide on tax on health and life insurance premiums.
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Choudhary is the convenor of the GoM. The panel comprises ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.
The Group of Ministers is required to deliver its report to the Council by the end of October.
