GST Council postpones decision on health, life insurance premiums
The Goods and Services Tax (GST) Council has deferred its decision, on potentially reducing the tax rate for health and life insurance premiums, as reported by ET NOW. The current GST rate for these policies is 18%. The industry had anticipated a reduction to alleviate the financial strain on policyholders. This issue will now be addressed in the next council meeting.
Council reviewed eport on insurance premiums
A comprehensive report detailing the impact of GST on life, health, and reinsurance premiums was presented before the GST Council. This report was expected to guide discussions about a potential reduction in the tax rate for health insurance premiums. There were even rumors that the GST could be completely removed from these premiums.
Fitment Committee assesses impact of GST reduction
The Fitment Committee, which includes central and state tax officials, met on Sunday to evaluate the advantages and disadvantages of lowering the GST rate on health premiums. This meeting was crucial in informing the council's decision. West Bengal's Finance Minister Chandrima Bhattacharya had previously requested a reduction in the 18% GST rate on life and health insurance premiums.
GST Council's role and revenue from health insurance premiums
The GST Council, led by Finance Minister Nirmala Sitharaman and including state finance ministers, is responsible for determining tax rate adjustments. In the fiscal year 2023-24, the Indian government and states collected ₹8,262.94 crore via GST on health insurance premiums. An additional ₹1,484.36 crore was collected as GST on health reinsurance premium.
GST Council to discuss taxation of online payments
The GST Council is also expected to discuss the taxation of online payments exceeding ₹2,000. Currently, online transactions made through payment gateways are not subject to GST. This issue was likely to be addressed during the meeting. The council had previously clarified that offshore gaming platforms were required to register with GST authorities, and pay taxes or face site blocking by the government.
