The 54th GST Council meeting is set to make a major decision on the GST rate on health insurance premiums on Monday.
According to sources, the GST Council is likely to provide significant relief to individuals and senior citizens by slashing the GST rate on health insurance premiums. Currently, there is an 18 per cent GST rate on health and life insurance policies.
Sources told ANI that the fitment committee, comprising central and state tax officials, discussed the pros and cons of reducing the GST rate on health premiums on Sunday.
On Monday, a report on GST levied on life, health, and reinsurance premiums, along with the revenue implications, will be presented before the GST Council. After that, Council members will discuss and decide whether to reduce the GST rate on health insurance premiums.
According to a source, the GST Council is likely to slash the GST rate on health insurance premiums from 18 per cent to nil. However, the 18 per cent GST rate on group health insurance premiums is likely to remain the same.
Sources also added that a proposal to tax online payments above Rs 2,000 is likely to be discussed in the GST Council meeting. Currently, online payments made through payment gateways are not taxed.
The GST Council is chaired by Finance Minister Nirmala Sitharaman and comprises state ministers as its members.
Last month, after the first meeting of the reconstituted Group of Ministers on GST for rate rationalisation, Samrat Chaudhary, Bihar Deputy CM and Convenor of GST GoM on rate rationalisation, had said that proposals had come for rate changes in the health insurance sector, and the group was reviewing the representations.
West Bengal Finance Minister Chandrima Bhattacharya has said that he has submitted a request to reduce the 18 per cent GST rate on life and health insurance premiums.
"I have placed the request for reducing GST on life and health insurance. I have been told that the fitment committee is looking into it," Bhattacharya said.
In the last GST Council meeting held on June 22, Finance Minister Nirmala Sitharaman announced several significant measures, including Aadhaar biometric integration, and exemptions in railway services, among others.