The GST Council on Sunday constituted a 13-member Group of Ministers (GoM) to counsel GST charge on premiums of assorted well being and life insurance coverage merchandise and submit its report by October 30. Bihar Deputy Chief Minister Samrat Choudhary is the convenor of the GoM. The members of the panel embody members from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.
The 54th GST Council assembly on September 9 determined to arrange a GoM to look at and overview the current tax construction of GST on life and medical insurance coverage. A ultimate name by the Council on the taxation of insurance coverage premiums is more likely to be taken within the subsequent assembly in November primarily based on the GoM report.
At present, 18 per cent of Items and Providers Tax (GST) is levied on insurance coverage premiums.
The Phrases of Reference (ToR) of the panel additionally embody suggesting tax charge of well being/medical insurance coverage together with particular person, group, household floater and different medical insurance coverage for varied classes like senior residents, center class, individuals with psychological sickness. Additionally, counsel tax charges on life insurance coverage, together with time period insurance coverage, life insurance coverage with funding plans whether or not particular person or group and re-insurance.
“The GoM is to submit its report by October 30,” 2024,” mentioned the Workplace Memorandum issued by the GST Council Secretariat on the Structure of GoM on Life and Medical insurance.
Some opposition-ruled states, together with West Bengal, had demanded full exemption of GST on well being and life insurance coverage premiums, whereas another states have been in favour of reducing the tax to five per cent.
Even Transport Minister Nitin Gadkari had in July written to Finance Miniter Nirmala Sitharaman on the difficulty saying “levying GST on life insurance coverage premium quantities to levying tax on the uncertainties of life.”
In 2023-24, the Centre and states collected Rs 8,262.94 crore by means of GST on medical health insurance premiums, whereas Rs 1,484.36 crore was collected on account of GST on well being reinsurance premiums.
Sitharaman in her reply to a dialogue on the Finance Invoice within the Lok Sabha in August had mentioned that 75 per cent of the GST collected goes to states and the Opposition members ought to ask their state finance ministers to convey the proposal to the GST Council.
