GST Cut On Medical Insurance: A Group of Ministers has been tasked to look into GST rates related to medical insurance and come up with a report by October so that the GST Council can take up the matter in the November meeting.”There were a lot of discussions about whether we should reduce the rate or exempt it, whom should we exempt and whom should not, what happens to group insurance; are we going to carve out only for senior citizens, will this not complicate the implementation?” Finance Minister Nirmala Sitharaman told reporters after hours-long GST Council meeting held on Monday.
A lot of issues were brought up for further discussion today in the GST Council, Sitharaman said, adding that which is why they felt it should go through a rigorous looking into by the GoM.It will be the rate rationalization GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose.
#GSTCouncilMeet | Union Finance Minister @nsitharaman announces that the GST compensation cess is projected to reach ₹8,66,706 crores by March 2025, with ₹6,64,203 crores already paid out as of September 5.
The extended compensation cess, which will continue until March 2026,… pic.twitter.com/Dcj6SyGTKj — DD News (@DDNewslive) September 9, 2024
“We have told them that they will look into this matter and come up with a report by the end of October 2024. The #GST Council which will meet in November, will finalize based on this report which will come from the GoM,” she added.
Both life insurance and medical insurance premiums attract a GST rate of 18 per cent.Recently, many leaders from opposition-ruled states have requested Finance Minister Sitharaman to reduce GST on medical insurance and premiums.
Recommendations during 54th meeting of the GST Council
GST Council recommends Group of Ministers (GoM) on life and health insurance related GST with existing GoM on Rate Rationalisation; to submit report by end of October 2024
GST Council also recommends formation of a… pic.twitter.com/FYX3o4Txgv — Ministry of Finance (@FinMinIndia) September 9, 2024
West Bengal Chief Minister Mamata Banerjee has requested the central government to withdraw the Goods and Services Tax (GST) on life insurance and health insurance premiums, terming the taxation on such items as “anti-people.”During the recently concluded Parliament session, the INDIA alliance leaders held a protest against the Central government outside the Parliament, demanding to roll back GST on health and life insurance products.
Congress leader Rahul Gandhi also joined the protest.Against that context, Sitharaman had asked the members to write to their respective state’s finance minister so that they could take it up in the GST Council meeting.Speaking on the suggestions by many Opposition members to reduce GST. on health insurance premiums, Finance Minister Nirmala Sitharaman stated that taxes were imposed on such items even before the GST regime came into effect in 2017.
The GST Council, consisting of the Union Finance Minister and representatives from all States and Union Territories, was established to make decisions on various aspects of GST, including tax rates, exemptions, and administrative procedures.The GST regime was brought in to remove the inefficiencies. and complexities of the previous archaic taxation system.
Over the years, GST has, among others, simplified compliance and reduced the cascading impact of tax. Before July 1, 2017, the indirect tax regime was highly fragmented. The Center and States were separately taxing goods and services.The GST Council, a federal body, comprises the Union Finance Minister as its Chairman and Finance Ministers from states and Union territories.