India GST Council Delays Decision to Cut Tax Rates for Health-Life Insurance

The Council then postponed decisions to cut taxes on health and life insurance premiums, pending further discussions next month, as it faced revenue concerns.

During its 55th meeting, the GST Council postponed the decision on lowering GST rates for health and life insurance. Bihar Deputy Chief Minister Samrat Chaudhary emphasized the need for further talks before reintroducing the proposal, as GoM is slated to meet in January.

Elderly health insurance premiums and term life insurance were two on which the GoM earlier debated exempting GST and finally reduced it to 5% for health insurance up to Rs 5 lakh. States expressed revenue concerns, while the council explored tax changes for electric vehicles and luxury goods.

Thus, the decision taken by the GST Council on the insurance premiums will have a deep impact on insurers as well as the policyholders. A tax reduction has the potential for making insurance cheap to purchase while an expense discussion will forever continue to the detriment of revenue issues faced by some ministers from different states.