What to Expect from Today GST Council Meeting: Insurance Tax and Payment Aggregators on the Agenda
Monday, September 09, 2024: The 54th meeting of the Goods and Services Tax (GST) Council is set to take place today, with a focus on reducing the tax burden on health insurance premiums. The council, chaired by Union Finance Minister Nirmala Sitharaman, is expected to discuss lowering the current 18% GST rate on life and health insurance premiums, potentially providing relief to individuals and senior citizens.
Proposed GST Rate Cut on Health Insurance Premiums
According to sources, the GST Council is likely to slash the GST rate on individual health insurance premiums from 18% to nil, while the rate on group health insurance premiums is expected to remain the same. This move aims to make health insurance more affordable and accessible to the general public.
The fitment committee, comprising central and state tax officials, has already discussed the pros and cons of reducing the GST rate on health premiums. A report on GST levied on life, health, and reinsurance premiums, along with the revenue implications, will be presented before the GST Council during the meeting.
Potential Impact on Insurance Costs
If the GST Council approves the proposed reduction in the GST rate on health insurance premiums, it could result in lower insurance costs for policyholders. This measure is expected to provide significant relief to individuals and senior citizens who often face financial constraints when it comes to purchasing health insurance policies.
The council is also likely to consider exempting foreign airlines’ head offices from GST on imported services received without consideration. This decision could potentially reduce the tax burden on these foreign airlines.
Other Agenda Items
In addition to the proposed changes in health insurance taxation, the GST Council is expected to discuss other important agenda items, such as:
- Taxing online payments above Rs 2,000: The council may consider imposing a tax on online payments made through payment gateways, which are currently not taxed.
- Uniform GST rate on steel, iron, and aluminum milk cans: In the last meeting held in June 2024, the council recommended a uniform GST rate of 12% on all steel, iron, and aluminum milk cans.
- Exempting certain railway services from GST: The council also proposed exempting services provided by Indian Railways to the general public, such as platform tickets, retiring rooms, waiting rooms, and battery-operated car services, from GST.
