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In Charts: Removing GST on health insurance may hurt Govt, but benefit India

Money Control

Money Control · 11m ago

In Charts: Removing GST on health insurance may hurt Govt, but benefit India

The Indian government may face a revenue loss if the Goods and Services Tax (GST) on health and life insurance is reduced from 18 percent to 5 percent. The current GST on health insurance has brought in around Rs 8,262.9 crore in revenue. If the reduced rate is implemented, the projected revenue loss could be around Rs 6,000 crore to Rs 8,300 crore. However, the lower tax rate may encourage more people to obtain insurance coverage, which is currently low in India. The issue has been referred to a group of ministers for a decision by October 31.

Related News

GST exemption could take a toll on insurers' health

Economic Times

Economic Times · 6d ago

GST exemption could take a toll on insurers' health

Exempting life and health insurance premiums from GST may result in lower costs for policyholders but could reduce insurers' margins, prompting potential price adjustments. If input tax credits on expenses like commissions are lost, insurers might either raise premiums or absorb costs, affecting profitability. The competitive term-insurance market faces a dilemma: increasing premiums risks customer loss, while not doing so impacts margins. Insurers must decide on operating at reduced margins or losing market share.

GST on health and life insurance premiums may be reduced: CNBC-Awaaz

Money Control

Money Control · 1y ago

GST on health and life insurance premiums may be reduced: CNBC-Awaaz

The Goods and Services Tax (GST) Committee might not support the complete exemption of health and life insurance from taxation, according to sources. A proposal has been submitted to the GST rate rationalization committee to decrease the GST rate on premiums paid for health and life insurance from the current 18% to 5%. However, the committee is reportedly not in favor of fully exempting GST on insurance premiums. Shares of major insurance companies have reacted positively to the news. The committee will meet on August 22 to discuss the proposal.

GST Council to deliberate on taxation of insurance premium, report on online gaming

YourStory

YourStory · 11m ago

GST Council to deliberate on taxation of insurance premium, report on online gaming

The GST Council is set to discuss several issues, such as taxation of insurance premiums and rate rationalisation, during its meeting. The fitment committee is expected to present a report on the GST levied on life, health, and reinsurance premiums. The council will decide on reducing the tax burden on health insurance and potentially exempt certain individuals, such as senior citizens. There will also be discussions on the GST cut on life insurance premiums. Furthermore, the council will receive a status report on online gaming, including the revenue implications of the GST imposed on the sector.

PM Modi's Diwali sparkle faces tough test amid Trump’s tariff sting

Economic Times

Economic Times · 2d ago

PM Modi's Diwali sparkle faces tough test amid Trump’s tariff sting

Prime Minister Narendra Modi plans to offset potential US tariff increases with lower consumption taxes in India, as President Trump threatens to double tariffs on Indian goods. While this may ease consumer burdens, it raises concerns over state revenue sharing and economic strategy. The auto industry and consumer sectors may benefit, but inventory and sales dynamics may be disrupted. The GST Council's reform approval is essential, amid challenges in managing economic and political fallout.

Profiteering worries cast cloud over GST cuts

Livemint

Livemint · 25d ago

Profiteering worries cast cloud over GST cuts

Concerns over profiteering are delaying new GST tax cuts as businesses might not pass on the benefits to consumers. Previously, some real estate, multiplex, and consumer goods companies raised prices during tax reductions. This fear affects proposals for reducing taxes on insurance premiums and removing the 12% GST slab. The national anti-profiteering body was dissolved in 2022, and no effective replacement exists to counter such practices.

GoM on rate rationalisation meets to discuss Centre's GST rate cut proposal

YourStory

YourStory · 8d ago

GoM on rate rationalisation meets to discuss Centre's GST rate cut proposal

The Centre has proposed GST reforms by reducing tax slabs from four to two (5% and 18%), aiming for a simpler, transparent, and growth-oriented tax regime. A Group of Ministers (GoM) is deliberating this proposal, which may offer relief to various sectors. The GoM is also discussing exempting GST on health and life insurance, which could impact revenue by Rs 9,700 crore annually. The reforms include a special 40% rate on specific items.

Health Issue: Cos seek 5% GST on water purifiers

Economic Times

Economic Times · 1d ago

Health Issue: Cos seek 5% GST on water purifiers

Water purifier manufacturers are advocating for a reduction in the GST rate on water purifiers from 12% to 5%, arguing that it is crucial for public health and aligns with national initiatives like 'Har Ghar Jal' aimed at providing piped water to households. The Water Quality India Association believes lowering GST will reduce costs, benefit middle-class consumers, and increase demand. This proposal aligns with broader GST rationalization efforts by the government and will be discussed in upcoming meetings.

GST Council likely to exempt term life insurance from tax, no change in investment-linked plans

Money Control

Money Control · 12m ago

GST Council likely to exempt term life insurance from tax, no change in investment-linked plans

The GST Council in India is expected to exempt term life insurance policies from the goods and services tax (GST) in an effort to boost demand for pure protection policies. The decision is expected to be made in a GST Council meeting on September 9. However, insurance policies with an investment component will continue to be taxed. This move is seen as a welcome step to make insurance more affordable and increase insurance penetration in India. Investment-linked life insurance plans will still attract GST and remain relatively costly.

Sitharaman to meet state FMs for pre-Budget, GST Council meet on Dec 21-22

YourStory

YourStory · 9m ago

Sitharaman to meet state FMs for pre-Budget, GST Council meet on Dec 21-22

Union Finance Minister, Nirmala Sitharaman, is scheduled to meet with state finance ministers on December 21-22 for pre-budget consultations and a meeting of the Goods and Services Tax (GST) Council. During this meeting, state ministers will present their recommendations for the 2025-26 Budget, and discussions on exemption or lower GST rates for health and life insurance will take place. The Council may also consider reducing tax rates on common items from 12% to 5%. The meeting is likely to be held in either Jaisalmer or Jodhpur, Rajasthan. Discussions on rate rationalisation and the current four-tier tax structure under GST will also be held.

GST Council likely to deliberate on exemption of health, life insurance on Sept 9

Money Control

Money Control · 11m ago

GST Council likely to deliberate on exemption of health, life insurance on Sept 9

The GST Council is set to discuss the exemption of health and life insurance from the 18% GST levy at its meeting on September 9. The proposal is being examined by the Council's Fitment Committee, which evaluates rate rationalization suggestions. The decision will need to consider the potential revenue loss, and the committee's analysis and recommendations will play a crucial role in shaping the Council's final decision. Union Minister for Road, Transport and Highways Nitin Gadkari has formally appealed for the withdrawal of GST on life and medical insurance premiums, emphasizing that taxing these essential services restricts their accessibility and growth.

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