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GST Council Meeting: In the new year 2025, we may get the gift of reduction in GST on life insurance and health insurance. A meeting is going to be held with the Finance Ministers of the states in Rajasthan on 21-22 December 2024 under the chairmanship of Finance Minister Nirmala Sitharaman. In this two-day meeting, on one day the Finance Minister will take suggestions and recommendations from the Finance Ministers of the states regarding the budget before the financial year 2025-26 and on the other day there will be the 55th meeting of the GST Council in which the decision will be taken to reduce GST on health insurance along with life insurance. It is possible.
In the upcoming meeting of the GST Council, 18 percent GST on term insurance plans can be completely abolished. At the same time, GST can be abolished for senior citizens and others purchasing health insurance up to Rs 5 lakh. The GST Council may rationalize GST rates on some products and services and reduce GST rates on some goods from 12 per cent to 5 per cent, PTI quoted an official as saying.
The Group of Ministers constituted to consider GST on health and life insurance has agreed to eliminate GST on term insurance and exempt health insurance for senior citizens from GST. Additionally, it is also proposed to eliminate GST on premium payments by individuals on health insurance up to Rs 5 lakh. However, health insurance premiums above Rs 5 lakh will continue to attract 18 per cent GST. The Group of Ministers was asked to submit a report in the GST Council meeting held in September 2024.
The Group of Ministers constituted to rationalize the GST rate has suggested changes in GST rates on packaged drinking water, bicycles, exercise notebooks, luxury wrist watches and shoes. This change in GST rate will bring revenue benefit of Rs 22000 crore to the government. The Group of Ministers has proposed to reduce the GST rate on 20 liter packaged drinking water from 18 percent to 5 percent, on bicycles costing less than Rs 10,000 from 12 percent to 5 percent. There is also a proposal to reduce the GST rate on exercise notebooks from 12 percent to 5 percent. Whereas it has been proposed to increase the GST rate on shoes costing more than Rs 15,000 from 18 percent to 28 percent and on watches costing more than Rs 25,000 from 18 percent to 28 percent.
