Next meeting of GST Council on 21st December, term insurance may get tax exemption

New Delhi, 15 November (HS). In the next meeting of the GST Council, a decision can be taken on the proposal to exempt the premium of term life insurance policy from tax. The 55th meeting of the council will be held on December 21 in Jaisalmer, Rajasthan, which will be attended by the finance ministers of the states along with Union Finance Minister Nirmala Sitharaman. Earlier this meeting was to be held in November, but later its date was fixed as December 21. In the meeting, the Finance Ministers of the states will also present their suggestions for the general budget to be presented on February 1 next year.

It is being told that in the next meeting of the GST Council to be held in Jaisalmer, a decision can be taken to reduce the tax on many commonly used items from 12 percent to 5 percent slab. A Committee of Ministers (GoM) of the states has given its report in this regard. In October itself, the Group of Ministers constituted on Health and Life Insurance has made some important recommendations to the GST Council. In these recommendations, it has been agreed to exempt the premium of term life insurance policy from GST. Along with this, the Group of Ministers has also proposed to exempt the health insurance premium of senior citizens from GST. It is believed that this proposal may also be approved in the GST Council meeting. Under this, exemption can be given in GST applicable on health insurance premium up to a maximum of Rs 5 lakh, while GST will continue as before on the premium of policies with health insurance coverage more than Rs 5 lakh.

At present, under GST, tax is collected in total 4 slabs. The first slab of these is 5 percent. Apart from this, tax is also collected in the slabs of 12 percent, 18 percent and 28 percent. Many essential goods and services are exempted from GST or have been kept in the 5 percent tax bracket. At the same time, more tax is collected on luxury items. Now there is a demand to review the GST slabs also. Experts say that the government may soon reduce the four slabs of GST to three.