New Delhi, Dec 23: GST Council postponed a decision on cutting 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 comprising state counterparts, decided that some more technicalities needed to be ironed out and tasked the GoM for further deliberations.
Bihar Deputy Chief Minister Samrat Chaudhary said one more meeting of the GoM on insurance is required to take a call on taxation of group, individual, senior citizens’ policies.
“Some members said more discussions required. We (GoM) will meet in January again,” Chaudhary told reporters.
A Group of Ministers (GOM) set up by the Council under Chaudhary, in its meeting in November had agreed on exempting insurance premiums paid for term life insurance policies from GST.
Also premium paid by senior citizens towards health insurance cover has been proposed to be exempted from the tax.
Besides, premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted from GST.
However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.
GoM On Rate Rationalisation Defers Report Submission To GST Council
The GoM on GST rate rationalisation on Saturday deferred submission of its report, which suggested rate rationalisation in 148 items, to the GST Council, the panel’s convenor and Bihar Deputy Chief Minister Samrat Chaudhary said.
“Will submit the Group of Ministers (GoM) report on rate rationalisation in next meeting of the Council,” Chaudhary told reporters here.
It was widely expected that the GoM would submit its report to the GST Council meeting on Saturday.
Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at highest bracket of 28 per cent, while packed food and essential items are at the lowest 5 per cent slab.
The GoM had also decided to propose rationalising tax rates on apparel. As per the decision, ready-made garments costing up to Rs 1,500 would attract 5 per cent GST, those between Rs 1,500 to Rs 10,000 would attract 18 per cent. Garments costing above Rs 10,000 would attract 28 per cent tax.