New Delhi: Most members of the GST Ministerial Panel are in favor of exempting term life insurance policies and senior citizens’ health insurance premium. The two categories are likely to be exempted from GST as most members of a state ministerial panel favoured cutting taxes to benefit the common man. The GoM to decide on GST on health and life insurance premiums, decided to exempt GST on premiums paid by individuals, other than senior citizens, for health insurance with a coverage of up to Rs 5 lakh.
However, 18 per cent GST will continue to be levied for a health insurance cover of over Rs 5 lakh. A final decision on GST on health and life insurance premiums as well as rate rationalisation is likely to the taken by the GST Council, chaired by Union Finance Minister and comprising state counterparts, in its meeting scheduled to take place next month. “The rate rejig exercise will help the states and Centre to realise revenue gain of Rs 22,000 crore, which will help cover the revenue loss from reduction in GST rates for insurance premiums,” the official added.
Talking to reporters after the GoM meetings, Bihar Deputy CM Samrat Chaudhary, who is the convenor of the health and life insurance GoM, said, “Every GoM member wants to give relief to people. Special focus will be on senior citizens. We will submit a report to the council for taking a final decision.” Chaudhary, who is also a convener of the GoM on rate rationalisation, said the panel would meet again before submitting its report to the council. This was the first meeting of the 13-member GoM health and life insurance premiums, which was set up to last month to suggest tax rates.