New Delhi: The Centre has proposed exempting individual life and health insurance policies from GST, Bihar Deputy Chief Minister and convenor of insurance GoM Samrat Choudhary said Wednesday.
Currently, health and life insurance premium attracts 18 per cent GST.
The Group of Ministers (GoM) on life and health insurance will submit its report to the GST Council. The report will also include views and concerns expressed by some state finance ministers, he said.
“The Centre’s proposal is clear that the insurance sector’s individual and family (policies) should be exempt from GST. This has been discussed and the GoM report will be presented to the Council,” Choudhary told reporters here after the meeting of the GoM.
“All members have given their approval for lowering rates. Some states have given their own views,” he said, adding a final call on rates will be taken by the Council.
Choudhary is the convenor of the 13-member state GoM on health and life insurance.
The Centre’s proposal on insurance is part of the overall next-Gen GST reform proposal under which goods and services tax will be levied at 2 rates– 5 and 18 per cent — based on categorisation of products as merit and standard.
The 13-member GoM on health and life insurance was set up in September to suggest tax rates.
The panel, which includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana, has been mandated to submit its report to the GST Council by October end.
In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health insurance premium, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium.
PTI
