GoM To Review GST Rates, Health And Life Insurance Premiums In Focus

New Delhi- The Group of Ministers (GoM) tasked with reviewing the Goods and Services Tax (GST) rate structure will convene on Saturday, October 19th, to discuss potential changes, including a reduction in the 18% GST rate on health and life insurance premiums. The meeting will also focus on adjusting existing tax slabs to streamline the GST framework.

Bihar's Deputy Chief Minister, Samrat Choudhary, will lead the discussions on potential tax reductions. The GoM, formed to provide recommendations to the GST Council, comprises ministers from various states including Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu, and Telangana.

Currently, a 18% GST rate is applied to both health and life insurance premiums. In the 2023-24 financial year, this tax yielded ₹8,262.94 crore in revenue for the central and state governments from health insurance premiums alone, and ₹1,484.36 crore from health reinsurance premiums.

The GoM is expected to submit its final report to the GST Council by October-end. In addition to discussing insurance premiums, the GoM will also deliberate on broader GST rate rationalization measures, such as reducing the 12% tax slab, expanding the 5% slab, and lowering taxes on essential items like medical supplies, bicycles, and bottled water. The 12% and 18% GST slabs may be merged to simplify the tax structure.

A separate GoM, also led by Choudhary, is concurrently working on a broader review of GST rates. This group will examine ways to compensate for potential revenue losses resulting from reduced tax rates on common goods, including increasing the GST on aerated water and beverages.