The GST Council, in its 55th meeting on Saturday, postponed decisions regarding a reduction in tax rates on life and health insurance premiums, as well as a proposed tax rate restructuring aimed at boosting revenue collection. According to three individuals familiar with the discussions, two ministerial panels opted to deliberate further before presenting their recommendations to the federal indirect tax authority.
This decision allows state finance ministers and officials from central and state governments to hold additional discussions. Samrat Chaudhary, Bihar’s deputy chief minister and convenor of the group of ministers (GoM) on insurance, stated that the panel had yet to submit its proposals to the Council.
“For the report from the GST GoM, several ministers suggested another round of discussions. Whether it is group insurance, individual insurance, or senior citizens’ insurance, we plan to hold another meeting to finalize the details,” Chaudhary informed reporters.
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Chaudhary, who also leads the ministerial panel on GST rate rationalization—an initiative aimed at improving tax revenue through higher rates and fixing anomalies—confirmed that the panel’s recommendations were not submitted to the Council.
Another source familiar with the Council’s discussions revealed that the decision on lowering insurance tax rates had been deferred, and the panel on rate rationalization had not yet shared its proposals.
In its November meeting, the GoM had proposed exemptions for term life insurance premiums from GST. It also recommended GST exemptions for health insurance premiums paid by senior citizens and for policies with coverage up to ₹5 lakh. However, policies exceeding ₹5 lakh in coverage would continue to attract an 18% GST rate.