GST Council to take up tax on insurance, rate rejig of over 100 items
November 15, 2024
In the previous meeting, held on September 9, the Council has set up two Group of Ministers’ (GoM) panels: one to review GST rates on several items, and other to decide on the tax levied on health and life insurance premiums.
The Goods and Services Tax (GST) Council is likely to discuss the relief on GST on health and life insurance items, as well as rejigging of rates on over 100 items as it is scheduled to meet at Jaisalmer in Rajasthan on December 21, sources said.
The meeting was earlier scheduled to be held in November, but was delayed due to assembly elections in Jharkhand and Maharashtra. The winter session of Parliament is set to begin on November 25 and end on December 20.
In the previous meeting, held on September 9, the Council has set up two Group of Ministers’ (GoM) panels: one to review GST rates on several items, and other to decide on the tax levied on health and life insurance premiums. The two GoM panels are expected to submit their reports to the Council for perusal, based on which the latter will take a final call on the issues.
On October 19, the GoM tasked with reviewing tax on health/life insurance, took a view that no GST should be levied on term life insurance, health insurance cover up to Rs 5 lakh, and premiums paid by ‘senior citizens’ above 60 years. It, however, decided against a complete tax waiver for health insurance, where the GST is levied at 18% at present.
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, meanwhile, on the same day, 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.
The panel decided to recommend lowering of GST rates 20-litre packaged drinking water bottles, bicycles and exercise notebooks to 5%, and raising taxes on high-end wrist watches and shoes, among other products. It also favoured taxing wrist watches above Rs 25,000 and shoes above Rs 15,000 at 28% from 18% at present.
[The Financial Express]
