GST Council defers decision on tax cuts on insurance premia due to lack of consensus: Bihar Deputy CM

The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, has deferred the decision on reducing GST rates for insurance premiums, including health and life insurance. The discussions were based on a Group of Ministers’ (GoM) report, but differences among GoM members led to the delay.

Bihar Deputy Chief Minister Samrat Chowdhary confirmed that while there was a discussion on reducing GST for health and life insurance premiums, further deliberation is needed.

“We felt there should be one more meeting on this,” he stated, adding that the GoM on insurance is likely to meet again in January for further discussions.

The issue of reducing GST on insurance premiums has been under consideration for some time.

State Finance Minister Suresh Kumar Khanna highlighted that inputs from the Insurance Regulatory and Development Authority of India (IRDAI) are being sought for further assessment.

However, industry experts expressed concern over the delay.

Nilesh Sathe, Former Member (Life) of IRDAI, said, “Even if there is a substantial revenue loss, it was advisable that GST on health insurance premiums should have been reduced. It is disheartening to see that GST was not reduced and this will now impact health and life insurance industry negatively.”

MS Mani, Partner at Deloitte India, said, “Everyone was expecting a decision on the reduction in GST on insurance premiums. After 7 years of GST, certain services like health insurance and term life cover should be considered essential services.”

Catch all updates related to GST Council meet here