Vikrant Shekhawat : Oct 19, 2024, 10:20 PM
GST Update: The discussion of making life and health insurance premiums tax-free has intensified in India. Currently, 18% GST is levied on them, but recently a group of ministers has proposed to make term life and health insurance premiums tax-free for senior citizens.In a meeting chaired by Bihar Deputy Chief Minister Samrat Chaudhary, it was agreed that health and term life insurance premiums for senior citizens can be exempted from GST. However, this decision is not yet final; the group of ministers will submit a report with its recommendations to the GST Council, where the final decision will be taken.Additionally, the group of ministers has also recommended exemption from GST on health insurance premiums with coverage up to Rs 5 lakh, while 18% GST will remain applicable on premiums above Rs 5 lakh. There will be no limit on this coverage for senior citizens.Ministers from 13 states who attended the meeting also put forward other proposals to change the GST rates. It has been suggested to reduce the GST rate on 20-litre water bottles, bicycles and practice notebooks to 5%. In contrast, it has been recommended to increase the tax on expensive shoes and wristwatches.The Group of Ministers believes that these amendments can give the government an additional revenue of Rs 22,000 crore. For example, currently 18% GST is levied on water bottles of 20 litres or more, which has been suggested to be reduced to 5%. Similarly, it is proposed to increase the GST rate from 18% to 28% on shoes costing more than Rs 15,000 and wristwatches costing more than Rs 25,000.The aim of these proposals is not only to make health insurance affordable for senior citizens, but also to rationalise the tax rates on essential commodities. This is likely to provide better financial support to the citizens of the country, especially those who are more sensitive to health services.