Lower GST on insurance? Don’t delay your premium payment

If you have a health or life insurance premium renewal coming up, don't wait for a reduction in the goods and services tax. It is expected that the process of reduction in the GST rate on insurance premium will stretch over the next few months.
 
“The Group of Ministers is still in the process of finalising its recommendations. It will then be taken up in the GST Council meeting and there is no clear timeline on when this will be approved,” explained a source familiar with the development.
 
While the overall rate rationalisation exercise for GST could take some time, the reduction in the tax rate for insurance premium could be taken up at the next meeting of the Council. Sources explained that at present no date has been fixed for the next meeting of the GST Council although it is expected that a meeting will take place towards the second half of November.
 
The Group of Ministers under the GST Council that has been mandated to review the rates on insurance products had met on October 19. The GoM led by Deputy Chief Minister of Bihar Samrat Choudhary, is of the view that term life insurance and health covers of senior citizens should be exempt from GST. Similarly, health insurance policies for individuals other than senior citizens with a cover of up to Rs 5 lakh should also be exempt from GST.
 
The move, if it goes through, will provide a significant relief to consumers. At present, GST at the rate of 18% is levied on insurance, which is borne by the policyholder.
 
The GoM is expected to hold another meeting and will submit its report to the GST Council by October 30.
 
At the last meeting of the GST Council in September, Finance Minister Nirmala Sitharaman, who chairs the Council, had announced the formation of the GoM. She had also said that the report of the GoM would be taken in the Council meeting in November.