New Delhi:   In the year 2025, there may be a reduction in GST on life insurance and health insurance. A meeting is going to be held with the finance ministers of the states in Rajasthan on 21-22 December 2024 under the chairmanship of Finance Minister Nirmala Sitharaman. In this two-day meeting, on one day the Finance Minister will take suggestions and recommendations from the Finance Ministers of the states regarding the budget before the financial year 2025-26 and on one day the 55th meeting of the GST Council will be held in which a decision can be taken to reduce GST on health insurance along with life insurance.

In the upcoming meeting of the GST Council, the 18 percent GST on term insurance plans may be completely abolished. At the same time, GST on senior citizens and others who buy health insurance up to Rs 5 lakh may be abolished. PTI quoted an official as saying that the GST Council may rationalize GST rates on some products and services and reduce GST rates on some items from 12 percent to 5 percent.

Views on GST

The group of ministers constituted to consider GST on health and life insurance has agreed to abolish GST on term insurance and exempt health insurance for senior citizens from GST. Apart from this, it is also proposed to abolish GST on premium payments by individuals on health insurance up to Rs 5 lakh. However, 18 percent GST will continue to be levied on health insurance premiums above Rs 5 lakh. The group of ministers was asked to submit the report in the GST Council meeting to be held in September 2024.