GST on Life and Health Insurance Likely to Be Removed

According to sources reported by CNBC-TV18, a consensus has emerged among states to remove GST (Goods and Services Tax) on life and health insurance premiums. The Group of Ministers (GoM) formed on this issue has seen agreement from most participating states in recent meetings.

The concern raised during the discussions was that the benefit of the GST exemption should directly reach policyholders and customers. There was also emphasis on ensuring that there is no adverse inversion impact on consumers due to this tax relief.

Bihar Deputy Chief Minister Samrat Choudhary, the convenor of the GoM, confirmed that consensus is building toward GST exemption on insurance. The Central Government has proposed a blanket GST exemption on all individual life and health insurance policies, which currently attract 18% GST.

While a few states expressed concerns, the GoM is expected to submit its final report to the GST Council. Upon approval, this exemption could bring significant financial relief to insurance customers, making premiums more affordable.

Sources indicate that the government is working on defining procedures and frameworks to ensure smooth implementation and cost-effectiveness of insurance policies for the general public.