The Goods and Services Tax (GST) Council of India has decided to defer the decision to remove the 18% GST on health and life insurance premiums, despite already reaching a broad consensus on the matter.
Headed by Union Finance Minister Nirmala Sitharaman, the council has decided to review the 18% tax imposed on health and life insurance premiums. It also revealed that the reassessment will have an October deadline, with a decision to be made in the council’s next meeting in November.
Given this, the Council also created a Group of Ministers (GoM), which is constituted “for the limited purpose of medical and health insurance”-related matters, and it will “come with a report by the end of October”. The GST Council will meet in November to make a final decision, she said.
According to Sitharaman, as reported by Hindustan Times, “There was good discussion. But, the details of the discussion made us feel that there is more to understand…for instance, many resident welfare associations have asked what if they do a group insurance for the residents? What happens to group insurance of companies? What happens to senior citizens? What happens to life insurance as opposed to term insurance?”
This decision comes after multiple organisations and stakeholders criticised the current tax rate, as it increases prices for such insurance premiums, making them less accessible to average consumers.
Back on August 6th, AAP, Lok Sabha opposition leader Rahul Gandhi, along with MPs from different parties such as AAP, Congress, TMC, and NCP (SC), staged a protest regarding the matter on the steps of parliament.
Right after the protest, Gandhi posted on X, writing: “Looking for a ‘tax opportunity’ in every disaster is proof of the insensitive thinking of the BJP government. INDIA Alliance opposes this opportunistic thinking. Health and life insurance must be made GST-free.”
