GST Council likely to decide on tax relief for life & health insurance at Dec 21 meet
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The GST Council will hold its next meeting in Rajasthan’s Jaisalmer on December 21, during which it is likely to take a decision on exempting or lowering the GST rate on health and life insurance.
The council, chaired by Union Finance Minister Nirmala Sitharaman, may also take up the issue of rationalising GST rates on a number of goods consumed by the common man such as bottled drinking water and notebooks for students, to bring them under the 5 per cent slab from 12 per cent at present.
The GST Council has asked the Group of Ministers (GoM) to finalise the report on the GST rate on insurance by the October-end.
After the GoM meeting on health and life insurance, the council met last month and arrived at a broad consensus on exempting GST on insurance premiums paid for life insurance policies, and senior citizens' health insurance.
GST on premiums paid by individuals, other than senior citizens, for health insurance of up to Rs 5 lakh, is proposed to be exempted. However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh.
The GoM on GST rate rationalisation also has suggested that the council rework tax rates on goods such as packaged drinking water, bicycles, exercise notebooks, luxury wristwatches, and shoes.
The GoM on rate rationalisation proposed reducing GST on packaged drinking water of 20 litres and above to 5 per cent from 18 per cent. If the GoM's recommendation is accepted by the GST council, GST on bicycles costing less than Rs 10,000 will be reduced to 5 per cent from 12 per cent while GST on notebooks used by students will be reduced to 5 per cent from 12 per cent.
The GoM also proposed increasing GST on shoes priced above Rs 15,000 from 18 per cent to 28 per cent. It also proposed raising GST on wristwatches costing above Rs 25,000 from 18 per cent to 28 per cent.
Currently, GST is a four-slab regime. Essential items are either exempted or taxed at 5 per cent while luxury goods face a 28 per cent levy. The 12 and 18 per cent slabs are positioned between the two.
