GST Council sets up GoM to review 18 per cent GST on health, life insurance
New Delhi: A Group of Ministers (GoM) has been assigned to review the GST rates applicable to medical insurance and submit a report by the end of October 2024. This report will be crucial for the GST Council’s meeting scheduled for November, where final decisions on this matter will be made.
“There were a lot of discussions about whether we should reduce the rate or exempt it, whom should we exempt and whom should not, what happens to group insurance; are we going to carve out only for senior citizens, will this not complicate the implementation?” Finance Minister Nirmala Sitharaman told reporters after hours-long GST Council meeting held on Monday, news agency PTI reported.
A lot of issues were brought up for further discussion today in the GST Council, Sitharaman said, adding that which is why they felt it should go through a rigorous looking into by the GoM.
Also Read:INDIA bloc stages protest against 18 per cent GST on health, life insurance premiums
It will be the rate rationalisation GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose.
According to the PTI report, she added, “We have told them that they will look into this matter and come up with a report by the end of October 2024. The #GST Council which will meet in November, will finalise based on this report which will come from the GoM.”
Both life insurance and medical insurance premiums attract a GST rate of 18 per cent.
Recently, many leaders from opposition-ruled states have requested Finance Minister Sitharaman to reduce GST on medical insurance and premiums. West Bengal Chief Minister Mamata Banerjee has requested the central government to withdraw the Goods and Services Tax (GST) on life insurance and health insurance premiums, terming the taxation on such items as “anti-people.”
During the recently concluded Parliament session, the INDIA alliance leaders held a protest against the Central government outside the Parliament, demanding to roll back GST on health and life insurance products. Congress leader Rahul Gandhi also joined the protest.
Against that context, Sitharaman had asked the members to write to their respective state’s finance minister so that they could take it up in the GST Council meeting.
Speaking on the suggestions by many Opposition members to reduce GST on health insurance premiums, Finance Minister Nirmala Sitharaman stated that taxes were imposed on such items even before the GST regime came into effect in 2017, adds PTI.
The GST Council, consisting of the Union Finance Minister and representatives from all States and Union Territories, was established to make decisions on various aspects of GST, including tax rates, exemptions, and administrative procedures.
The GST regime was brought in to remove the inefficiencies and complexities of the previous archaic taxation system. Over the years, GST has, among others, simplified compliance and reduced the cascading impact of tax. Before July 1, 2017, the indirect tax regime was highly fragmented. The Centre and States were separately taxing goods and services.
