Senior Citizens to Benefit from GST Relief on Health and Life Insurance
GST may soon be waived for term life insurance and senior citizen health premiums, following a decision by the Group of Ministers.
The Group of Ministers (GoM) has agreed to largely exempt the goods and services tax (GST) on term life insurance premiums and health insurance premiums paid by senior citizens. This decision, made on Saturday, is aimed at reducing the financial burden on policyholders, especially the elderly ().
The GST exemption/reduction on life and health insurance is a long-pending industry demand as the move would alleviate the tax burden on insurers and policyholders.
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While most of the panel members of the GoM, led by Bihar Deputy Chief Minister Samrat Chaudhary, pitched for "full exemption" on health and life policy premiums, a few panel members suggested reducing the rate to 5 percent from the current 18 percent.
The ministerial panel, tasked to rationalize rates, is scheduled to submit its recommendation to the GST Council by October 31.
GST-Free Life Insurance
The final decision in this regard will be taken by the GST Council when it meets next. At present, 18 percent GST is levied on life and health insurance premiums.The GST Council took up the matter in the September meeting, following the debate over the 18 percent GST levied on life and health insurance premiums.
The panel learned to have discussed the revenue implication in various options suggested by the Fitment Panel - comprising revenue officials of the Centre and states.
Other options discussed during the GoM meeting included exempting premiums paid by senior citizens and premiums with coverage up to Rs 5 lakh, or only exempting premiums paid by senior citizens from the GST ambit.
Last month, the GST Council, headed by Finance Minister Nirmala Sitharaman, set up a GoM on slashing the tax rate on life and health insurance, as well as reducing the GST on cancer drugs.
The 54th GST Council meeting, held on September 9, reached a "broad consensus" to bring relief to individuals and senior citizens with a decision on the GST applied to health insurance premiums.
Reference:
- 54th Meeting of the GST Council - (https:cbic-gst.gov.in/pdf/Press-Release-54-GSTC-090924.pdf)
Source: IANS