The fifty fifth GST Council assembly, set to happen quickly, will look at and evaluation the present Items and Providers Tax (GST) construction on life and medical insurance coverage. The Group of Ministers (GoM) on Well being Insurance coverage offered its suggestions to income officers from each the state and central governments on December 16. The report shall be reviewed by the GST Council throughout its assembly in Jaisalmer.
Key suggestions:
- Exemption for pure-term life insurance coverage: The GoM has proposed a GST exemption for pure time period life insurance coverage insurance policies that cowl relations. This could imply that these insurance policies is not going to be topic to GST, lowering the monetary burden on policyholders.
- Exemption on medical insurance for senior residents: One other main suggestion is the exemption of GST on medical insurance insurance policies particularly for senior residents, which might assist make healthcare extra reasonably priced for the aged inhabitants.
- Decreasing GST fee on particular person medical insurance: The GoM has additionally proposed lowering the GST fee on all particular person medical insurance insurance policies to five %, however with out the choice for Enter Tax Credit score (ITC). This could intention to decrease the price of medical insurance premiums for people whereas maintaining the method simple.
These proposals, if adopted, may considerably impression the construction of the GST on life and medical insurance, probably lowering premiums and rising accessibility to insurance coverage merchandise for extra folks.
At current, an 18 % GST on insurance coverage premium is charged. Sources indicated that the Council is more likely to okay a proposal to exempt well being and life insurance coverage insurance policies as much as Rs 5 lakh from GST. The target is to decrease the taxation burden on decrease and center revenue teams. It is usually doubtless to supply comparable exemptions for insurance policies for senior residents.
The GST Council, headed by Union Finance Minister Nirmala Sitharaman, and members from all states and union territories, is scheduled to satisfy in Jaisalmer on December 21.
