The Goods and Services Tax (GST) Council has postponed its decision to reduce tax rates on life and health insurance premiums following its 55th meeting, held on Saturday in Jaisalmer, Rajasthan. The meeting, chaired by Union Finance Minister Nirmala Sitharaman, concluded with members agreeing that additional technical discussions were necessary before finalising the matter. A Group of Ministers (GoM) has been tasked with conducting further deliberations, according to sources.
Bihar’s Deputy Chief Minister, Samrat Chaudhary, who heads the GoM on insurance, confirmed that another meeting would take place in January to discuss the taxation of group, individual, and senior citizens’ insurance policies. “Some members said more discussions are required. We (GoM) will meet in January again,” Chaudhary stated to reporters.
In its earlier meeting in November, the GoM proposed exempting GST on premiums for term life insurance and recommended similar exemptions for premiums paid by senior citizens for health insurance. It also suggested waiving GST for health insurance policies with coverage up to Rs 5 lakh, though maintaining the 18% GST rate on policies with coverage exceeding Rs 5 lakh.
The 55th meeting saw the participation of key officials, including Finance Minister Sitharaman, Minister of State for Finance Pankaj Chaudhary, Chief Ministers and Deputy Chief Ministers of various states, along with senior officials from the Finance Ministry and the Central Board of Indirect Taxes & Customs (CBIC).
Although the official agenda of the meeting was not disclosed, insiders highlighted that rationalising GST rates on life and health insurance was a priority item. The GoM report on this subject had been submitted to the GST Council for review.
Discussions on these tax exemptions are seen as critical for addressing affordability concerns, particularly for senior citizens and low-income individuals. However, the council remains divided on some aspects, prompting the need for further deliberations before arriving at a consensus.
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