GST GoM reaches consensus on exemptions for term life and health insurance
The revenue loss from the exemption of term life insurance from GST is estimated to be around Rs 200 crore annually.
To formalise these proposals, the GoM is scheduled to submit a report to the GST Council by October 31.
In a significant move, the Goods and Services Tax (GST) Group of Ministers (GoM) reached a consensus on October 19 to exempt term life insurance premiums and health insurance for senior citizens from the GST net. The GoM has also agreed to propose a GST exemption for health insurance policies offering coverage up to Rs 5 lakh, sources told Moneycontrol.
"Premiums paid for all Individual Term Life Insurances would be exempted from GST. It will also cover family members associated with the individual. The GoM members agreed to the proposal," a source revealed.
Additionally, the GoM has proposed a complete GST exemption for health insurance premiums paid by senior citizens, regardless of the coverage amount. "Premiums paid for Health Insurances by senior citizens (irrespective of coverage) would be exempted from GST. Premiums paid for health insurance (up to a coverage of Rs 5 lakh) by other individuals would be exempted from GST," the source added.
The GoM is expected to submit a formal report to the GST Council by October 31, which will be reviewed and discussed in the Council's next meeting. An additional meeting may be scheduled to finalise the report's details and ensure all proposals are thoroughly examined.
"The revenue loss from these decisions on lowering GST on life and health insurance will not be much," he said.
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