GST Council postpones decision to reduce tax on health, health insurance

The GST Council on Saturday postponed the decision to reduce the tax rate on life and health insurance premiums, officials said. The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and her state colleagues, decided that some technicalities needed to be fixed and tasked the GoM with further deliberations.

Deputy Chief Minister of Bihar, Samrat Chaudhary, said another GoM meeting on insurance is needed to call for tax on group, individual, policies for senior citizens. “Some members said that more discussions are needed. We (GoM) will meet again in January,” Chaudhary told reporters.

The Group of Ministers (GOM) constituted by the Council under Chaudhary, in its meeting in November had agreed on the exemption of insurance premiums paid for long-term insurance policies from GST.

And the money paid by the elderly for health insurance is proposed to be tax-free.

Besides, premiums paid by individuals, other than senior citizens, for health insurance with a cover of up to Rs 5 lakh are proposed to be exempted from GST.

However, 18 percent GST will continue on premiums paid for health insurance policies above Rs 5 lakh.