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The GoM (Group of Ministers) made the decision to exempt term life insurance premiums and health insurance premiums up to Rs 5 lakh in coverage due to the rationalization of GST rates.
NEW DELHI: On Saturday, the GoM (Group of Ministers) made the decision to exempt term life insurance premiums and health insurance premiums up to Rs 5 lakh in coverage due to the rationalization of GST rates. In addition to proposing a higher 28 percent tax on luxury shoes and wristwatches, it also suggested lowering the tax rates on 20-liter bottled drinking water bottles, bicycles, and exercise notebooks to 5%.
The panel of ministers, led by Bihar Deputy Chief Minister Samrat Chaudhary, suggested raising prices on many commodities and lowering rates on others. The whole change is anticipated to result in a Rs 22,000 crore revenue surplus.
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For those other than elderly citizens, the GoM decided to exempt premiums paid for health insurance with coverage of Rs 5 lakh from GST. Over Rs 5 lakh in premiums for health insurance coverage would still be subject to 18% GST.
However, regardless of the quantity of coverage, senior citizens’ insurance premiums may not be subject to GST. The GST Council will make the final decision on this matter.
At the moment, life insurance premiums paid for term and family floater policies are subject to an 18% GST tax. “Every member of the GoM wants to help people,” Chaudhary stated. Seniors should receive special attention. The council will receive a report from us. The council will make a final decision.
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Additionally, the GoM decided to increase the GST from 18% to 28% on shoes costing more than Rs 15,000 per pair and wrist watches costing more than Rs 25,000.
The GoM suggested lowering the 18% GST on packaged drinking water that is 20 liters or more to 5%. Additionally, it resolved to lower the tax rate for bicycles less Rs 10,000 from 12% to 5%. The GoM suggested that the 12% GST on exercise notebooks be lowered to 5%.
