GST Council To Meet In Dec; Tax Relief On Health, Life Insurance On Watch

The GST Council is set to discuss a potential tax relief on a slew of insurance plans ranging across health and life insurance premiums on December 23 and December 24. The meeting was supposed to take place in November, however, it has been shifted alongside the upcoming pre-budget consultations.

The upcoming meeting in December will focus on several issues ranging across food inflation, unemployment, rural job creation, and capex momentum.

A government official told Moneycontrol, “Earlier, the finance minister had indicated that the GST Council meeting would be held in November, but it’s now set for December-end, coinciding with the pre-budget meetings with state finance ministers to gather suggestions for the Union Budget.”

The meeting is likely to lay stress on budget planning, GST policy discussions, while also keeping a tap on offering relief for health and life insurance policies, added the government official.

Notably, both the meetings will be held in Rajasthan’s Jodhpur or Jaisalmer.

Overview on key insurance premiums

Taxpayers are expecting full exemption on term life insurance premiums and health insurance premiums for senior citizens. Currently, life as well health insurance premiums are taxed at 18%, which raises an additional burden for policyholders.

Notably, the Group of Ministers (GoM) have recommended to provide relief, which will in turn affect a significant proportion of the population. This mainly includes beneficiaries who are senior citizens and policyholders of similar schemes.

The executive organ has also proposed exemption on premium paid for term life insurance, which covers individual policies and associated family members.

It also suggested giving exemption on health insurance premiums for senior citizens.

Exempting life insurance premium can lead to a revenue loss of ₹200 crore. However, the government is aiming to meet this shortfall by proposing changes to GST on various items.