In its 55th meeting held on Saturday, the GST Council decided to postpone reducing the tax rate on premiums for life and health insurance policies.
Officials noted that further technical issues need to be resolved before making a final decision.
To address these concerns, a Group of Ministers (GoM) has been tasked with discussing the matter in detail.
GoM to Meet Again in January
The meeting, chaired by Union Finance Minister Nirmala Sitharaman and attended by state finance ministers, included deliberations on the taxation of various types of insurance policies, including group, individual, and senior citizen policies.
Bihar Deputy Chief Minister Samrat Choudhary, who leads the GoM on Insurance, confirmed that the group would reconvene in January to finalize its recommendations.
He remarked, “Some members suggested that further discussions are required. We (GoM) will meet again in January.”
Proposals for GST Exemptions
The GoM, under Choudhary’s leadership, had previously recommended certain GST exemptions.
During a November meeting, the GoM proposed exempting GST on premiums for term life insurance policies.
The group also suggested a GST exemption for health insurance premiums paid by senior citizens.
For other individuals, health insurance premiums up to ₹5 lakh may be exempted, while premiums exceeding ₹5 lakh would still attract an 18% GST rate.
