GST Council meet to decide on lower taxes on insurance policies, ATF inclusion

55th GST Council meeting in Jaisalmer to discuss tax rate reduction on health insurance, ATF inclusion, and rate rejigs.

The 55th GST Council meeting which is expected to decide on reducing tax rate on health and life insurance, besides considering rate rejigs on 148 items began in Rajasthan’s Jaisalmer on Saturday (December 21, 2024.)

The GST Council, chaired by Union Finance Minster Nirmala Sitharaman and comprising her State counterparts, is also expected to deliberate on bringing Aviation Turbine Fuel (ATF) in Goods and Services Tax fold.

One of the major items on the agenda of the Council is to decide the GST rate on health and life insurance.

A Group of Ministers (GoM) set up by the Council under Bihar Deputy Chief Minister Samrat Chaudhary, in its meeting in November, had agreed on exempting insurance premiums paid for term life insurance policies from GST.

Also premium paid by senior citizens towards health insurance cover has been proposed to be exempted from the tax. Besides, GST on premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to ₹5 lakh is proposed to be exempted.

However, 18% GST will continue on premiums paid for policies with health insurance cover of more than ₹5 lakh. A final decision of the insurance taxation under GST is likely on Saturday (December 21, 2024) as most States are in favour of lowering taxes on premium to give relief to the common man.

Several proposals of Fitment Committee, comprising officials from the Centre and States GST Department would come up for review before the Council. One of the proposals include cutting taxes on food delivery platforms such as Swiggy and Zomato, to 5% (without input tax credit), from the current 18% (with ITC).