The 55th GST Council meeting is likely to discuss the reduction of the Goods and Services Tax (GST) rates on life and health insurance, which has been a topic of consideration for some time. If the proposal is approved, it would significantly impact the premiums that individuals pay for life and health insurance policies.
according to report, The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, was scheduled to begin in Jaisalmer on Saturday, with the planned rate decrease on health insurance premiums and the inclusion of Aviation Turbine Fuel (ATF) under the GST scope among the primary focal areas. During the meeting, the GST Council will also consider changing the rates of roughly 150 products, which is expected to help the Centre raise an additional Rs 22,000 crore in income. The proposed rate drop on term health and life insurance premiums is an important item on the GST Council’s agenda.
Currently, life and health insurance premiums are taxed at 18% GST, which has been a concern for many, especially since the tax burden on these essential services tends to make them more expensive for the general public. A reduction in the tax rate could make insurance products more affordable, encouraging greater coverage for individuals and families.
about this change:
- Health insurance premiums: With healthcare costs rising, reducing the tax rate on health insurance could help make policies more accessible, particularly to middle and lower-income groups.
- Life insurance premiums: A tax reduction could lead to more affordable life insurance options, encouraging more people to invest in policies that secure their future.
- The meeting may reduce the GST rate for food delivery platforms like Swiggy and Zamato. This will make online food ordering cheaper. The government may reduce the GST on these apps. Currently, these apps are subject to 18% GST along with ITC (Input Tax Credit). There is a proposal to reduce it to 5%.
- GST slab of 35 per cent may be introduced on tobacco products. Around 148 items may be brought under GST rate. Aviation turbine fuel may also be brought under GST ambit.
- GST rate on the sale of small petrol and diesel vehicles, including electronic vehicles, may be increased from 12% to 18%. This will bring the prices of used and old small cars and EVs at par with old large vehicles.
The decision could also be part of a broader effort by the government to stimulate the insurance sector and enhance the penetration of insurance products, which are relatively low in India compared to many developed nations.
Once the GST Council meets, we will have further details on whether the reduction will be approved and the exact timeline for the changes to take effect.
