GST Council Delays Tax Decision on Insurance Premiums

The GST Council postponed a decision on reducing tax for life and health insurance premiums after its 55th meeting. Further discussions are needed, with exemptions proposed for certain policies. The Group of Ministers will reconvene in January to address the issues.

The Goods and Services Tax (GST) Council, in its 55th meeting chaired by Union Finance Minister Nirmala Sitharaman, has decided to defer the decision on cutting tax rates for life and health insurance premiums. Officials announced that further technicalities need to be explored before a definitive plan is set.

Bihar Deputy Chief Minister Samrat Chaudhary reported that the Group of Ministers (GoM) will convene again in January to deliberate further on the taxation of various insurance policies, including those for groups, individuals, and senior citizens.

The GoM's November meeting proposed exempting term life insurance premiums and health insurance premiums for senior citizens from GST. Additionally, insurance premiums up to Rs 5 lakh for individuals may also be exempted, though policies exceeding Rs 5 lakh will still incur an 18% GST.

(With inputs from agencies.)