GST on premium for long term life insurance, old age health coverage may be exempted

Goods and Services Tax (GST) on long-term insurance premiums, and premiums paid by senior citizens for health insurance may be exempted, an official said on Saturday.

The GoM to decide on the rate of GST on life and health insurance met on Saturday and decided to exempt GST on premiums paid for health insurance with a cover of Rs 5 lakh for individuals other than senior citizens.

The final decision in this regard will be taken by GST Council Officials premiums paid for health insurance coverage above Rs 5 lakh will continue to attract 18 percent GST.

Currently, 18 percent GST is levied on life insurance premiums paid for term policies and family floating policies.

“The GoM members are busy reducing the rates on insurance premiums. The final decision will be taken by the GST Council,” said the official.

Bihar Deputy Chief Minister Samrat Chaudhary said, “All members of the GoM want to provide help to the people. Special focus will be on the elderly. We will submit a report to the council. The final decision will be taken by the council”.

However, there may be no GST on insurance premiums paid for senior citizens, regardless of the amount covered.

The GST Council in its meeting last month decided to set up a 13-member GoM to decide on the tax payable on health and life insurance.

Choudhary is the convener of the GoM. The panel includes ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.

The GoM is mandated to submit its report to the Council by the end of October.