GST reduction on health insurance, life insurance: Will GST on insurance be reduced to zero for all?

Published By: Economic Times Wealth​

Published Date: 17th October 2024​

The Goods and Services Tax (GST) Council is considering reducing the 18% GST on life and health insurance premiums to provide financial relief to policyholders. A Group of Ministers (GoM) has been tasked with overseeing this rate rationalisation and is expected to submit a report to the GST Council by October 31, 2024.

The proposed reductions aim to make insurance more affordable, particularly for senior citizens. However, implementing a zero-GST rate could impact insurance companies' ability to claim Input Tax Credit (ITC), potentially increasing operational costs and affecting premium pricing. The final decision will be made by the GST Council after reviewing the GoM's recommendations.