54th GST Council Meeting likely to provide Big Relief to Individuals and Senior Citizens on Health Insurance Premiums

The 54th GST Council will make an important decision on the GST rate for health insurance premiums on Monday.

As per the sources, the GST Council is planning to provide major relief to individuals and senior citizens by lowering the GST rate on health insurance premiums. Health and life insurance policies currently attract an 18% GST rate.

Sources said on Sunday that the fitment committee, which included central and state tax authorities, reviewed the advantages and disadvantages of lowering the GST rate on health premiums.

On Monday, the GST Council will hear a report on the GST levied on life, health, and reinsurance premiums, as well as the revenue consequences. Following that, Council members will consider and determine whether to lower the GST rate on health insurance premiums.

Based on a reliable source, the GST Council is likely to reduce the GST rate on health insurance premiums from 18% to 0%. However, the 18% GST rate on group health insurance premiums is likely to remain unchanged.

Sources further added that a proposal to tax online payments beyond Rs.2,000 would likely be debated at the GST Council meeting. Currently, internet payments conducted via payment gateways are not taxed.

The GST Council is chaired by Finance Minister Nirmala Sitharaman and has state ministers as members.

Last month, following the first meeting of the reconstituted Group of Ministers on GST for rate rationalisation, Samrat Chaudhary, Bihar Deputy Chief Minister and Convenor of the GST GoM on rate rationalisation, stated that proposals for rate changes in the health insurance sector had been received, and the group was reviewing the representations.

West Bengal Finance Minister Chandrima Bhattacharya has claimed he has requested a reduction in the 18% GST rate on life and health insurance premiums.

“I have submitted a request to reduce GST on life and health insurance. I’ve been assured that the fitment committee is looking into it,” Bhattacharya explained.

Finance Minister Nirmala Sitharaman announced numerous key reforms at the recent GST Council meeting on June 22, including Aadhaar biometric integration and exclusions for railway services, among others.