Goods and services tax (GST) on term life insurance premiums, and premium paid by senior citizens for health cover is likely to be exempted from tax, an official said on Saturday.
The GoM decided on the GST rate on life and health insurance and decided to exempt GST on premiums paid for health insurance with coverage of Rs 5 lakh for individuals other than senior citizens.
The final decision in this regard will be taken by the GST Council
Officials premiums paid for health insurance coverage of above Rs 5 lakh will continue to attract 18 per cent GST.
Currently, 18 per cent GST is levied on life insurance premiums paid for term policies and family floater policies.
“GoM members are broadly on board for cutting my rates on insurance premiums. A final decision will be taken by the GST Council,” an official said.
Bihar Deputy Chief Minister Samrat Chaudhary said, “Every GoM member wants to give relief to people. Special focus be on senior citizens. We will submit a report to the council. A final decision will be taken by the council”.
However, there might be no GST on insurance premiums paid for senior citizens, irrespective of the coverage amount.
The GST Council in its meeting last month had decided to set up a 13-member GoM to decide on tax on health and life insurance premiums.
Choudhary is the convenor of the GoM. 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.
