GST Council to meet on September 9; may discuss to deduct health insurance premium tax deduction

The GST Council will meet on Monday, September 9, in New Delhi to present a roadmap for the compensation cess, which is expected to remain "well into" 2025-26 (FY26), and to consider whether it should finally be replaced with a tax or a cess.

It is believed that a decision regarding GST on health insurance can be made at this meeting. According to the sources, the Fitment Committee (FS) is not in favour of giving a complete GST exemption on premiums. However, the committee has made some suggestions to the council, and it is believed that a decision regarding GST on health insurance can be taken in this meeting.

The FC includes revenue officers of both the central and state governments. At present, the committee has given some options to the council and left the decision to them. It has also been told what kind of impact can be seen on the revenue if those options are selected. If sources are to be believed, tax reduction on health insurance is being considered in one of the four ways. The FC believes that the deduction should be made only when the life insurance company provides benefits to the insured. It is being told that the Council can consider giving rate reductions in life insurance only to term and re-insurance.

Around a month ago, Union Minister of Road Transport and Highways Nitin Gadkari requested Finance Minister Nirmala Sitharaman to withdraw the 18 per cent goods and services tax (GST) on life and medical insurance premiums.

In his letter to the Finance Minister, Gadkari raised concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted to him a memorandum regarding the issues of the insurance industry.

Also Read: Minister Nitin Gadkari urges FM Nirmala Sitharaman to withdraw 18% GST on life, medical insurance premiums