IRDAI and DFS Welcome Proposal to Lower GST Rates on Various Health Policies

A proposal for rationalising GST on insurance premiums has surged with the Financial Services department and the Issuance Regulatory and Development Authority of India (IRDAI) assisting the move, before the GST council meeting.

On December 21, the GST Council 55th meeting is scheduled to meet at Jaisalmer in Rajasthan and one possible item on the agenda is restructuring the GST on insurance premiums. Earlier a Group of Ministers advocated waiving the premiums filed on health insurance for senior citizens, health insurance with coverage of Rs.5 lakh, and term life insurance. GoM for all other policies is recommended to retain the current rates.

There is an 18% GST on the premia for health insurance, term, and unit-linked insurance plans as of date. The applicability of the GST varies on the endowment plans. It is 4.5% for the premium filed in the first year it is 2.25% from the second year. The rate of GST is 1.8% for life insurance in the form of single-premium annuity policies. For all age groups, the rates are identical.

The IRDAI before a Parliamentary panel cited distinct developed countries, including the European Union and Canada, exempted insurance products from VAT or GST. The same supports the claim to furnish identical benefits in India to uplift greater insurance penetration, it mentioned.

Source : https://blog.saginfotech.com/irdai-dfs-welcome-proposal-lower-gst-rates-health-policies#