GST council meeting today: Tax on health insurance premiums expected to be reduced, says report

The 54th GST Council meeting, scheduled for today, could bring a pivotal change to the taxation of health insurance premiums, with the possibility of reducing the current GST rate.

As per an ANI report, the Council is considering a substantial reduction in the GST applied to health insurance premiums, a move expected to benefit both individuals and the elderly. At present, these policies are subject to an 18% GST.

Discussions within the Council's fitment committee, composed of both central and state tax authorities, took place on Sunday, weighing the potential advantages and drawbacks of such a reduction.

Today, a detailed report concerning the GST levied on life, health, and reinsurance premiums will be tabled, highlighting its revenue implications. Following the presentation, the Council will debate the merits of adjusting the GST rate on health insurance premiums.

According to the ANI report, a source said that the Council is leaning towards removing the 18% GST on individual health insurance premiums entirely. However, group health insurance policies are likely to retain the existing tax rate.

Additionally, there is a proposal under consideration to introduce a tax on online payments exceeding Rs 2,000. Currently, transactions made via online payment platforms remain untaxed.

Finance Minister Nirmala Sitharaman leads the GST Council, with state ministers serving as members.

In a previous meeting, the Group of Ministers tasked with reviewing GST rates discussed potential reforms in the health insurance sector. Bihar’s Deputy Chief Minister, Samrat Chaudhary, who heads this group, indicated that suggestions for changes in insurance tax rates were actively being examined.

West Bengal’s Finance Minister, Chandrima Bhattacharya, also advocated for reducing the 18% GST rate on life and health insurance, noting that the fitment committee was assessing the request.

During the Council's last meeting in June, Finance Minister Sitharaman introduced several key reforms, including Aadhaar-based biometric integration and exemptions in railway services.