GST council meeting under way, relief likely on health insurance premium

NEW DELHI: The 54th meeting of the Goods and Services Tax (GST) Council got under way at Sushma Swaraj Bhawan, New Delhi, on Monday under the chairmanship of union Finance Minister Nirmala Sitharaman. The meeting is attended by key officials of the finance ministry along with the finance ministers of different states.

The Ministry of Finance posted on X, “Union Finance Minister @nsitharaman chairs the 54th meeting of the GST Council, at Sushma Swaraj Bhawan, in New Delhi, today. Along with the Union Finance Minister, Union Minister of State for Finance @mppchaudhary ; Chief Ministers of Goa and Meghalaya; Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana; besides Finance Ministers of States & UTs (with legislature) and Senior officers from Union Government & States are also attending the meeting”.

Sources told ANI that the GST Council is expected to provide significant relief to individuals and senior citizens by lowering the GST rate on health insurance premiums. Currently, both health and life insurance policies premiums attracts 18 percent GST.

Union Finance Minister Smt. @nsitharaman chairs the 54th meeting of the GST Council, at Sushma Swaraj Bhawan, in New Delhi, today.

Along with the Union Finance Minister, Union Minister of State for Finance Shri @mppchaudhary; Chief Ministers of Goa and Meghalaya; Deputy Chief… pic.twitter.com/9oTANxzKYm

— Ministry of Finance (@FinMinIndia) September 9, 2024

According to sources, the fitment committee of GST Council, consisting of central and state tax officials, evaluated the advantages and disadvantages of reducing the GST rate on health insurance premiums on Sunday.

A report of the fitment committee outlining the GST levied on life, health, and reinsurance premiums, along with its revenue impact, will be submitted to the GST Council. The Council members will then discuss and decide whether to implement the proposed reduction in GST on health insurance premiums.

One source also indicated that the GST Council may reduce the GST on individual health insurance premiums from 18 per cent to nil, although the 18 per cent GST rate for group health insurance premiums is expected to remain unchanged.

Meanwhile, Aam Aadmi Party leader and Delhi Minister Atishi on Monday said that if GST is implemented on research grants that institutes receive then the Delhi government and the Punjab government will strongly oppose it during the 54th meeting of the GST Council.

“The Central Government is continuously reducing the amount of research grants from its budget and on the other hand, when education institutes are bringing research grants on their own, then 18 per cent GST is being imposed on them…If an institute like IIT Delhi is researching certain types of vehicles, aircraft and medical equipment, then why GST is imposed on it?” Atishi told ANI.

She further said that if there is talk of imposing any kind of GST on research grants given to the institutions, then the Delhi government would strongly oppose it.

“Another important issue is related to online payment. Till now, less than Rs 2,000 online payments were exempted from GST but there is a proposal that GST should be imposed on payments made through payment gateways. This will have a huge impact on small businesses and start-ups. If GST is implemented on health insurance, life Insurance and insurance for people with some mental disability, both the Delhi government and the Punjab government should strongly oppose this,” she added.

Punjab Finance Minister Harpal Singh Cheema said that they would speak about scrapping GST on health insurance. “Delhi and Punjab are on the same page regarding the agenda on Health insurance–whether GST should be imposed on Health Insurance. GST should not be imposed on this…We will speak about scrapping GST on health insurance. The second biggest issue is about research, be it a private or government institution, we oppose GST on them. Research is being done for the country, for its development, so there should be no GST on it,” Cheema said.

The GST Council is chaired by Nirmala Sitharaman and comprises state ministers as its members. (ANI)