Group of Ministers pushes for GST relief on individual insurance policies; report to be submitted to GST Council soon.
Government Pushes for GST Exemption on Personal Insurance
The Centre has proposed eliminating the 18% GST on life and health insurance premiums for individuals and families, aiming to ease financial burdens on millions. The recommendation comes from the Group of Ministers (GoM) on life and health insurance, led by Bihar Deputy Chief Minister Samrat Choudhary.
GoM to Submit Final Report to GST Council
- The GoM, composed of 13 members from various states, will include all feedback—especially those from state finance ministers—in its report.
- “The Centre’s proposal is clear that individual and family policies should be exempt from GST,” Choudhary said after the meeting.
- Final approval of the GST rates will be decided by the GST Council.
Broader Tax Reform: Next-Gen GST Framework
- The insurance proposal forms part of a larger reform plan under the Next-Gen GST structure, which envisions only two tax slabs: 5% and 18%.
- The GoM, established in September, includes ministers from states like Uttar Pradesh, Rajasthan, Kerala, Karnataka, West Bengal, and more, who are mandated to submit their findings by October end.
Revenue Impact of GST on Insurance
- In the fiscal year 2023–24, GST collected from health insurance premiums amounted to ₹8,262.94 crore.
- An additional ₹1,484.36 crore was collected from health reinsurance premiums.
What This Means for You
| Details | Implications |
|---|---|
| Tax Relief | Zero GST would lower the cost of personal insurance for households |
| Timeline | GoM report due by October; GST Council decision expected thereafter |
| State Feedback Matters | Input from multiple states may influence final decision |
| Fiscal Consideration | GST collections from insurance are substantial; budget impact to be reviewed |
If implemented, exempting GST on individual health and life insurance could make essential coverage more affordable and accessible. Keep an eye on the GoM report and the GST Council’s decision in the coming months—it may well be a turning point for personal finance in India.
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