The much-anticipated announcement regarding a potential reduction in the Goods and Services Tax (GST) on health insurance premiums has been postponed to November meeting. In its 54th meeting on Monday, the GST Council decided to form Group of Ministers (GoM) to look into the issues pertaining to GST on the life insurance and health insurance.

GoM members are Bihar, UP, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, Meghalaya, Goa, Telangana, Tamil Nadu, Punjab, and Gujarat.

It has been asked submit the report by end of October 2024.

The Fitment Committee, comprising the Centre and state tax officials, on Monday presented a report giving data and analysis and implications of GST reduction on life, health and reinsurance premiums.

The 54th GST Council meeting was expected to bring relief to individuals and senior citizens with a significant decision on the Goods and Services Tax (GST) rate applied to health insurance premiums.

The current GST rate on health and life insurance policies stands at 18 per cent, and the industry was expecting that this could be reduced to ease the financial burden on policyholders.

A report on the implications of GST levied on life, health, and reinsurance premiums will be presented to the GST Council, reported PTI, citing sources. After reviewing this report, the Council was expected to discuss whether to proceed with a reduction in the GST rate on health insurance premiums. There was also a speculation that the GST on health insurance premiums could be slashed from 18 per cent to nil.

The fitment committee, consisting of central and state tax officials, convened on Sunday to weigh the pros and cons of reducing the GST rate on health premiums.