New Delhi: An important meeting of the GST Council was held. Two issues were to be discussed in this meeting. It was a matter of reducing the GST rates on health insurance, and imposing 18% GST on online transactions (by debit and credit cards) of less than Rs 2000.
The insurance premium is not going to become cheaper, because the final decision on this issue has been postponed till the next meeting.
Apart from this, it has been decided to reduce the GST rates on Namkeen from 18% to 12%. Also, there has been a consensus on reducing the GST rates on some cancer medicines. During the meeting, the Finance Minister of Uttarakhand said that the GST on pilgrimage has been reduced to 5%.
In this meeting led by Finance Minister Nirmala Sitharaman, there was a broad consensus on reducing the GST rate on health and life insurance premium from the current 18 percent. But, the final decision on this will be taken in the next meeting of the GST Council. The modalities will be decided in the next meeting of the GST Council. Therefore, the decision to impose GST on insurance premium has been postponed in the council meeting. The next meeting of the GST Council is scheduled to be held in November.
Apart from this, the discussion was focused on the announcement of imposing 18% GST on payment aggregators like BillDesk and CCAvenue for small online transactions up to Rs 2000 through debit and credit cards. But no decision could be taken on this and the matter has been sent to the Fitment Committee for now.
Discussion on GST rate on health insurance
There is a broad consensus in the GST Council to reduce the current 18 percent GST rate on health insurance. The committee of tax officials of the Center and the States to rationalize the tax rate (Fitment Committee) presented a report before the GST Council. It contains data and analysis of GST reduction on life, health and reinsurance premiums. After participating in the meeting, Delhi Finance Minister Atishi approved it in a conversation with journalists.
This was the 54th meeting of the GST Council chaired by Finance Minister Nirmala Sitharaman. Finance ministers of all states were present in the meeting of this council held in Delhi. Currently, payment aggregators are exempted from paying GST on transactions of less than Rs 2000.
Most states in favor of reducing tax on insurance premium
According to sources, most states are in favor of reducing insurance premium rates. If GST rates are reduced, it will be beneficial for lakhs of policyholders, as the premium amount will decrease. Before GST, service tax was levied on insurance premium.
When GST was implemented in the year 2017, service tax was included in the GST system. The issue of taxing insurance premium was also raised in Parliament. Opposition members had demanded exemption of health and life insurance premium from GST. Even Union Minister Nitin Gadkari had raised questions on this issue.
Union Minister Nitin Gadkari had written a letter to the Finance Minister appealing for relief from this tax, since then the opposition has been making this issue a part of political discourse. At the same time, Union Finance Minister Nirmala Sitharaman also said in her reply after the discussion on the budget in Parliament that this issue would be raised in the GST Council.
