GST Council to Deliberate on Exemption of Health, Life Insurance on September 9
By: Admin | August 24, 2024 | Categories: GST Recent News | 4 Min Read
The GST Council is set to discuss the potential exemption of health and life insurance policies from the current 18% GST rate at its meeting on September 9. The Council’s Fitment Committee is currently analyzing the revenue implications of this proposal, which has sparked debate due to concerns that the tax burden on policyholders may hinder the insurance sector’s growth.
Key Points:
- Proposal Under Review: The Fitment Committee is evaluating the financial impact of removing GST on health and life insurance. Their recommendations will be crucial in shaping the Council’s final decision.
- Government Deliberations: The proposal has not yet been discussed by the Group of Ministers (GoM) on rate rationalization but is being examined thoroughly by the Fitment Committee.
- Industry Concerns: The 18% GST on insurance premiums has faced criticism for making these essential services less accessible to the public.
- Political Support: Union Minister Nitin Gadkari and West Bengal Chief Minister Mamata Banerjee have both voiced strong support for exempting these services from GST, emphasizing the importance of making life and health insurance more affordable.
- Expert Opinion: An exemption might not lower premiums directly but could reduce the tax cost, potentially benefiting policyholders if input tax credit (ITC) is passed on by insurance companies.
The GST Council, led by Finance Minister Nirmala Sitharaman, will carefully weigh the potential revenue losses against the public demand for tax relief when making their decision.
