GST panels propose slew of tax tweaks; rate changes likely for 100+ products
A Group of Ministers (GoM), tasked with reviewing the manner of Goods and Services Tax levy on life and health insurance premiums, has taken the view that term life insurance could be exempt from tax, along with health insurance cover up to Rs 5 lakh and premiums paid by ‘senior citizens’ above 60 years.
The panel, however, decided against a complete tax waiver for health insurance, where the GST is levied at 18% at present.
The GoM, which met on Saturday, will submit a report to the GST Council by October-end, which will finally take a call on the issue.
A complete exemption of term-life insurance from GST will cost the exchequer about Rs 200 crore annually, while exempting senior citizens’ health insurance premiums will cost another Rs 3,000 crore, sources said. Between FY22 and FY24 the total GST collected from health insurance premiums was about Rs 21,000 crore.
Another GoM on rate rationalisation, which also met here simultaneously, decided to recommend tweaks (hikes and cuts) in the GST rates on around 100 products, a move that would fetch the government additional annual revenue of Rs 22,000 crore, which is to be equally shared between the Centre and states.
