GST Council may give big relief on health insurance premium, rate can be reduced from 18% to zero
GST: The Fitment Committee consisting of central and state tax officials on Sunday discussed the pros and cons of reducing the GST rate on health premium, ANI reported quoting sources. On Monday, a report on the GST imposed on life, health and reinsurance premiums, along with revenue implications, will be presented before the GST Council.
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A major decision on the rates of GST for the premium paid on health insurance is expected to be announced during the 54th meeting of the GST Council that will take place on Monday. Sources say speculation is rife that the GST Council may provide some relief to individuals, specially senior citizens, through a reduction of GST rates on health insurance premium.
Presently, 18 percent Goods and Services Tax is charged on health policy and life insurance policy.
A fitment committee comprising central and state tax officials discussed the pros and cons of reducing GST rates on health premium on Sunday, ANI reported quoting sources. A report on GST levied on life, health and reinsurance premiums along with implications on revenue will be presented before the GST Council on Monday. After that, the council members will discuss and decide on reducing the GST rate on health insurance premium or not.
According to a source, the GST Council may abolish GST on health insurance premium by reducing the rate from 18 per cent to zero. However, sources said that 18 percent GST rate on group health insurance premium is likely to remain. Sources also said the GST Council meeting is likely to discuss a proposal to tax online payments above Rs 2,000.
Presently, the online payments made via payment gateways are not taxed. The GST Council is headed by Finance Minister Nirmala Sitharaman and state ministers will be its members. Last month, following the first meeting of the reconstituted Group of Ministers on GST to rationalise rates, Bihar Deputy Chief Minister and convener of the GST ministerial group on rationalisation of rates Samrat Choudhary had said that proposals have come for changes in rates in the health insurance sector and they are being considered. West Bengal Finance Minister Chandrima Bhattacharya had said, "I have requested to reduce GST on life and health insurance. I have been told that the fitment committee is considering it." Finance Minister Nirmala Sitharaman had made several key announcements in the last GST Council meeting held on June 22 including Aadhaar biometric integration and discounts on railway services.
