According to industry sources, the GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, is likely to discuss operationalizing the GST Appellate Tribunal mechanism, which is a key step towards rationalization of dispute resolution under the GST.
The meeting will discuss whether the tax burden on health insurance should be reduced from the current 18 percent or exempt certain categories of people, such as the elderly.
In the last fiscal year, the Center and states collected Rs 8,262.94 crore through GST on health insurance premiums and Rs 1,484.36 crore through GST on medical reinsurance premiums.
The meeting is also likely to discuss reducing the current four main GST slabs (5 per cent, 12 per cent, 18 per cent and 28 per cent) to possibly three slabs, according to talks that have been ongoing since some time ago.
According to industry experts, the move could simplify the tax structure and reduce compliance burdens.
Shivashish Karnani, head of GST at Dewan PN Chopra and Co, said the current rate of GST on health and life insurance premiums is 18 per cent, further accelerating the affordability issue. Accordingly, one of the key expectations of the 54th GST Council meeting is a reduction in tax rates or, ideally, complete exemption from GST on life and health insurance premiums, he mentioned.
The life and health insurance industry is hopeful that the meeting will result in a significant reduction in the GST rate from 18 per cent to a lower rate such as 5 per cent or even 0.1 per cent.
This reduction would alleviate the tax burden for both insurers and policyholders.
Finance Minister Sitharaman last week said the GST rate is well below the revenue neutral rate (RNR), originally suggested at 15.3 per cent, meaning less burden on taxpayers. The current average rate of GST has decreased to 12.2 per cent from 2023, well below the revenue-neutral rate of GST, the Finance Minister said. The Government needs to increase revenue, "but the first thing is to simplify, facilitate and ensure compliance by taxpayers," he added. The revenue neutral rate is the tax rate at which the government collects the same amount of revenue even after changes in tax laws.
The meeting will discuss whether the tax burden on health insurance should be reduced from the current 18 percent or exempt certain categories of people, such as the elderly.
In the last fiscal year, the Center and states collected Rs 8,262.94 crore through GST on health insurance premiums and Rs 1,484.36 crore through GST on medical reinsurance premiums.
The meeting is also likely to discuss reducing the current four main GST slabs (5 per cent, 12 per cent, 18 per cent and 28 per cent) to possibly three slabs, according to talks that have been ongoing since some time ago.
According to industry experts, the move could simplify the tax structure and reduce compliance burdens.
Shivashish Karnani, head of GST at Dewan PN Chopra and Co, said the current rate of GST on health and life insurance premiums is 18 per cent, further accelerating the affordability issue. Accordingly, one of the key expectations of the 54th GST Council meeting is a reduction in tax rates or, ideally, complete exemption from GST on life and health insurance premiums, he mentioned.
The life and health insurance industry is hopeful that the meeting will result in a significant reduction in the GST rate from 18 per cent to a lower rate such as 5 per cent or even 0.1 per cent.
This reduction would alleviate the tax burden for both insurers and policyholders.
Finance Minister Sitharaman last week said the GST rate is well below the revenue neutral rate (RNR), originally suggested at 15.3 per cent, meaning less burden on taxpayers. The current average rate of GST has decreased to 12.2 per cent from 2023, well below the revenue-neutral rate of GST, the Finance Minister said. The Government needs to increase revenue, "but the first thing is to simplify, facilitate and ensure compliance by taxpayers," he added. The revenue neutral rate is the tax rate at which the government collects the same amount of revenue even after changes in tax laws.
