The Group of Ministers ( GoM ) which was constituted as per the recommendation of 54th meeting of the GST Council assented to exemption for term life insurance premium for all and health insurance premium for senior citizens is reportedly in favour of tax relief to consumers in these insurance categories. The GoM members are broadly on board for cutting my rates on insurance premiums , the  final decision will be taken by the GST Council.

The GoM was formed to look into the issues pertaining to GST on the life insurance and health insurance. In addition, the GoM on GST rate rationalisation on Saturday deliberated on adjusting rates for various products and agreed to lower rates for several items such as packaged water above 20 litres (5 per cent from 18 per cent), bicycles costing less than Rs 10,000 (5 per cent from 12 per cent), and exercise notebooks (5 per cent from 12 per cent). Be a GST Expert: Get Essential Questions, Key Judgements and Practical Guide, Click Here The adjustment is projected to generate Rs 22,000 crore in revenue for both the states and the Centre, which will help offset losses resulting from the reduction in GST rates for insurance premiums and other items.

In the insurance sector, the likely outcome is a GST exemption on term life insurance premiums for everyone, including plans that consist of family members. Senior citizens are expected to benefit from GST exemption on health insurance premiums. Health insurance cover up to Rs 5 lakh is likely to be GST-free, while coverage above that amount will continue to attract an 18 per cent GST rate. Most states are on board for exempting term life insurance premium from GST. Term life insurance plans which include family members are also going to be exempt. For health insurance, total relief would be given to senior citizens and exemption up to Rs 5 lakh cover would be for others.

18 per cent GST will be retained for health insurance cover above Rs 5 lakh,” a state finance minister was quoted in the IE report as saying. Be a GST Expert: Get Essential Questions, Key Judgements and Practical Guide, Click Here  The panel includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana. The GoM has been mandated to submit its report to the Council by October.