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GST Council Forms GoM to Reduce GST on Health Insurance; Lowers Tax on Cancer Drugs
The taxation of insurance premiums has been a topic of debate in Parliament, with opposition members advocating for GST exemption on health and life insurance premiums. Even Transport Minister Nitin Gadkari had raised the issue in a letter to Sitharaman.
- By Newsdesk
- New Delhi
- Sep 10, 2024
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, announced on Monday the formation of a Group of Ministers (GoM) to explore reducing GST rates on life and health insurance. Additionally, the Council has decided to cut GST rates on cancer drugs and certain food items like namkeens.
During a briefing on the outcomes of the 54th GST Council meeting, Sitharaman shared that the GoM, led by Bihar Deputy Chief Minister Samrat Choudhary, will review GST rates on life and health insurance. New members will also join the group to assess GST on health insurance, with a report expected by the end of October.
The taxation of insurance premiums has been a topic of debate in Parliament, with opposition members advocating for GST exemption on health and life insurance premiums. Even Transport Minister Nitin Gadkari had raised the issue in a letter to Sitharaman. In response, Sitharaman noted that 75% of GST revenues go to the states and urged Opposition members to ask their state finance ministers to bring the issue to the GST Council.
In addition to the insurance discussions, the Council approved a reduction in GST on cancer drugs from 12% to 5% and lowered the rate on namkeens from 18% to 12%. The Council also plans to form another GoM to address compensation cess, which is set to expire after March 2026.
The meeting also included discussions on the GoM's status report regarding rate rationalization and online gaming. Furthermore, Sitharaman announced that a committee of secretaries, led by the Additional Secretary (Revenue), will be established to address the negative balance in the Integrated GST (IGST) account and explore methods to recover the funds from states.