The GST Council has arrived at a broad consensus on reducing or removing GST on health and life insurance premiums from the current 18%, but a final decision would be taken in the next meeting.
The Fitment Committee, comprising the central and state tax officials, presented a report at a GST Council meeting yesterday, giving data and analysis and implications of GST reduction on life, health and reinsurance premiums, reported Press Trust of India.
"Broad consensus has been reached on GST rate reduction on health and life insurance but modalities would be decided in the next council meeting," one of the sources said.
Reduced rates or a cut or the removal of the GST rate on health insurance premiums had been eagerly awaited, with insurers arguing that the GST deters people from buying essential insurance policies.
The GST collection from health insurance premiums and life insurance premiums for the fiscal year ended 31 March 2024 was INR82.63bn ($984m) and INR14.84m respectively.
The Constitution does not mention the number of GST Council meetings per year. However, the Council meets periodically to discuss and decide on important issues related to GST. Previous trends show that the GST Council met a minimum of four times in a year.
The GST Council is the key decision-making body on matters related to GST, including rates, exemptions, laws, etc. It has 33 members, including another official of the central government and 31 members from 28 states and three Union territories. These 31 regional representatives are state finance or taxation officials.