GST Council to Review Medical Insurance Rates Amidst Opposition Pressure

A Group of Ministers has been assigned to review GST rates on medical insurance, with a report due by October. The GST Council will make a final decision in November. Opposition leaders are calling for a reduction or elimination of GST on insurance premiums, citing it as 'anti-people.'

A Group of Ministers has been tasked with evaluating GST rates related to medical insurance, aiming to present their findings by October. This will allow the GST Council to address the issue in their November meeting, Finance Minister Nirmala Sitharaman announced after a lengthy GST Council session on Monday.

Sitharaman revealed that the council deliberated extensively on the matter, debating whether to reduce the GST rate or exempt certain categories altogether. The rigorous examination will be conducted by a specialized Group of Ministers (GoM), led by the Deputy Chief Minister of Bihar, with additional members included for this specific task.

"The GoM has been instructed to submit its report by October 2024, enabling the GST Council to finalize its stance during the November meeting," Sitharaman said. Currently, both life insurance and medical insurance premiums are subject to an 18% GST rate.

Recently, opposition leaders, including West Bengal Chief Minister Mamata Banerjee, have urged the Finance Minister to either reduce or abolish the GST on medical insurance, labeling the current taxation as 'anti-people.' During the last Parliament session, leaders from the INDIA alliance, including Rahul Gandhi, staged a protest against the Central government's stance on this issue.

Sitharaman had advised opposition members to communicate their suggestions through their respective state finance ministers for consideration in the GST Council meeting. She noted that taxes on insurance premiums existed even before the GST regime was introduced in 2017.

The GST Council, comprising the Union Finance Minister and representatives from all States and Union Territories, was established to streamline tax policies and procedures. The GST regime has successfully simplified compliance and reduced the cascading tax impact since its implementation on July 1, 2017, replacing the highly fragmented indirect tax system managed separately by the Centre and States.

The GST Council, a federal body, includes the Union Finance Minister as its Chairman along with Finance Ministers from states and Union territories. (ANI)

(With inputs from agencies.)