States back Centre’s move to exemptGST on insurance

States on Wednesday favoured the Centre’s proposal to exempt GST on individual life and health insurance policies, which currently attract 18% tax. The matter was discussed at the meeting of the Group of Ministers (GoM) on Health and Life Insurance, chaired by Bihar deputy CM Samrat Choudhary. He said all states agreed to the proposal, though some expressed reservations. GoM will submit its report to the GST Council, which will take a final decision next month. At present, 18% GST is levied on premiums paid on health and life insurance policies, generating Rs. 8,262.94 crore in 2023-24.
Telangana deputy chief minister Mallu Bhatti Vikramarka, however, cautioned that the relief should benefit policyholders and not companies.
The GST Council, chaired by Union finance minister Nirmala Sitharaman, is expected to take up the proposal as part of the government’s “next-generation” GST reforms.