GST reform push: Centre proposes GST exemption on life and health insurance; GoM to submit report by October

The Centre has proposed exempting individual life and health insurance policies from GST, Bihar Deputy Chief Minister and convenor of the Group of Ministers (GoM) on insurance Samrat Choudhary said on Wednesday. At present, insurance premiums attract 18% GST.“The Centre’s proposal is clear that the individual insurance policies should be exempt from GST. This has been discussed and the GoM report will be presented to the Council,” Choudhary told reporters after the GoM meeting, according to PTI. He added that “all members have given their approval for lowering rates,” though some states shared their own views.The GoM, set up in September, is preparing its report for the GST Council, which will take a final call on rates. The 13-member panel includes finance ministers from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.The Centre’s proposal is part of a broader next-generation GST reform plan that envisages just two rates — 5% for merit goods and 18% for standard goods and services.In 2023-24, GST collections on health insurance premium stood at Rs 8,262.94 crore, while Rs 1,484.36 crore was collected on health reinsurance premium.