Insurance Rate Rationalization: The upcoming GST Council meeting, scheduled for Dec 21, 2024 in Jaisalmer, will deliberate on the proposed rationalization of GST rates for health and life insurance products, according to sources.
A report on this matter has been submitted to the GST Council by the Group of Ministers (GoM) on insurance, led by Bihar Minister Samrat Chaudhary. The GoM was tasked with reviewing GST rates on medical insurance and presenting its recommendations for the Council’s consideration.
Currently, both life and health insurance premiums are subject to an 18% GST rate. Several leaders, especially from opposition-ruled states, have urged Union Finance Minister Nirmala Sitharaman to consider reducing these rates. West Bengal Chief Minister Mamata Banerjee is among those who have made this appeal.
The GST Council, a constitutional body that includes representatives from all states, union territories, and the central government, prescribes GST rates and exemptions based on its collective recommendations. The issue of GST on health and life insurance was initially discussed during the Council’s 54th meeting in September 2024 in New Delhi. Following extensive deliberations, the Council decided to form a GoM to address the matter comprehensively.
In August, during the monsoon session of Parliament, members of the INDIA alliance staged a protest outside Parliament, demanding the withdrawal of GST on health and life insurance premiums. Prominent leaders, including Congress MP Rahul Gandhi, participated in the demonstration.
The GST Council, which comprises the Union Finance Minister and representatives from states and UTs, is responsible for making key decisions on GST, including tax rates, exemptions, and procedural regulations.
India’s GST collections have shown a notable increase, reflecting economic resilience. In the current fiscal year 2024-25, GST revenues have risen by 9.3%, amounting to ₹14.56 lakh crore so far. This growth highlights strong domestic consumption and active import activities, showcasing a positive trajectory for the country’s fiscal health amidst global challenges.
In April 2024, the GST mop-up reached a record high of ₹2.10 lakh crore. For the financial year 2023-24, the total GST collections stood at ₹20.18 lakh crore, marking an 11.7% increase compared to the previous fiscal year.
Source of Information: https://health.economictimes.indiatimes.com/news/insurance/rate-rationalization-on-insurance-part-of-agenda-for-next-gst-council-meeting-sources/116466677?utm_source=top_story&utm_medium=homepage
