US EditionGoM Proposes GST Exemption on Health and Life Insurance for Individuals: Bihar Deputy CM - The Statesman
The exemption could reduce costs for millions of Indian policyholders and aims to improve insurance penetration, though concerns about revenue impact and tax credit loss persist.
- On August 20, the Group of Ministers recommended exempting health and life insurance premiums for individuals from GST, and Finance Minister Nirmala Sitharaman addressed the GoM on the proposal.
- As part of the next‑generation GST reforms, the Union Government plans to simplify slabs into two rates, 5% and 18%, aiming to reduce financial strain and boost insurance penetration in India.
- Currently, health and life insurance attract an 18% GST; Centre and states collected Rs 8,262.94 crore on health premiums and Rs 1,484.36 crore on reinsurance in 2023-24, with an estimated annual revenue loss of about Rs 9,700 crore if exempted.
- State finance ministers insisted on a mechanism to ensure tax savings lower premiums for policyholders, industry veterans cautioned about potential Input Tax Credit loss, and the Group of Ministers will submit its report to the GST Council for a decision next month.
- If approved, the exemption could improve affordability and accelerate insurance uptake for millions of policyholders, while the GST Council is expected to consider GoM recommendations next month ahead of Diwali.
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GoM Proposes Exempting GST on Health, Life Insurance for Individuals
Get latest articles and stories on Business at LatestLY. Finance Minister Nirmala Sitharaman on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan. Business News | GoM Proposes Exempting GST on Health, Life Insurance for Individuals.
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14%
14%
R 71%
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