Finance Minister Nirmala Sitharaman has stated that the cost of health and life insurance may decrease if the GST Council decides to lower the taxes on premiums.

Finance Minister Nirmala Sitharaman said the insurance cost could decrease if the GST Council recommends reducing GST rates for health and life insurance policies.

Sitharaman assured that competitive pricing among insurers would help pass on the benefits of any GST reduction to consumers, reducing overall insurance costs.

Currently, an 18% GST is applied to life and health insurance policy premiums.

The GST Council, chaired by Nirmala Sitharaman, will meet on 21st December to discuss the GoM report on reducing GST on life and health insurance.

In the 2023-24 fiscal, Rs 16,398 crore GST was collected from life and health insurance policies, with Rs 8,135 crore from life insurance and Rs 8,263 crore from health insurance.

Rs 2,045 crore was raised from life and health insurance re-insurance, including Rs 561 crore from life and Rs 1,484 crore from healthcare.

The first GoM meeting on life and health insurance, chaired by Bihar Deputy CM Samrat Chaudhary, was held on 19th October.

The GoM has agreed to exempt GST on premiums paid for term life insurance policies and senior citizens’ health insurance.

GST on premiums for health insurance with coverage up to Rs 5 lakh will be exempt for individuals, but an 18% GST will remain on policies with coverage over Rs 5 lakh.

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