For a long time, there has been a demand to reduce GST on Life Insurance and Health Insurance. Today, there is a meeting of the Group of Ministers in Delhi regarding this.
For a long time, there has been a demand to reduce GST on Life Insurance and Health Insurance. Today, there is a meeting of the Group of Ministers in Delhi regarding this. This is the first meeting of the GOM on Life and Health Insurance headed by the Deputy Chief Minister of Bihar.
In this meeting, it will be considered to exclude Life and Health Insurance from GST or reduce its rate to 5 percent. Let us tell you that at present, people have to pay 18 percent GST on Health and Life Insurance.
This is the first meeting of the GOM formed to reduce the rate on health and life insurance premium. The group of ministers headed by Bihar Deputy Chief Minister Samrat Chaudhary will give suggestions about reducing the tax rate on insurance premium to less than 18 percent.
A second meeting is also to be held
Another group of ministers headed by Chaudhary, which was formed to rationalize GST rates, will also meet. In this meeting, there will be discussions on reducing the 12 percent slab, bringing more goods under the purview of five percent tax, rationalizing taxes on medical and pharmaceutical goods, bicycles and bottled water. This group of ministers can also discuss the possibility of merging the rates of 12 and 18 percent.
The six-member group will discuss increasing the rates on goods like aerated water and beverages to compensate for the loss of revenue due to reducing the tax rate on goods used by the common people. Currently, the Goods and Services Tax (GST) has a four-tier structure of taxes in which the rates are five, 12, 18 and 28 percent.
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How is GST decided?
Under GST, essential goods are either exempted from tax or are kept in the lowest slab. On the other hand, luxury and harmful goods are kept in the highest tax slab. Along with this, the GST Council also constituted a group of ministers to explore the possibility of reducing the tax rate on health and life insurance premium from 18 percent.
This group has been asked to submit its report by the end of October. This GoM will suggest the tax rate of health/medical insurance including individual, group, family floater and other medical insurance for various categories like the elderly, middle class and people with mental illness.
Last financial year, the Center and the states collected a revenue of Rs 8,262.94 crore by imposing GST on health insurance premium. At the same time, Rs 1,484.36 crore was collected due to GST on health reinsurance premium.
