The upcoming meeting of the GST Council is anticipated to address the existing 18% GST rate on insurance products, with discussions revolving around potentially reducing or exempting this tax. Specifically, concerns have been raised regarding group insurance, pure life insurance versus term insurance, mental health-related insurance, and insurance for senior citizens. The formation of a Group of Ministers (GoM) to delve into these matters signifies a dedicated effort to thoroughly analyze and discuss the intricacies of GST on insurance.
The Finance Minister, Nirmala Sitharaman, emphasized the need for further examination and deliberation on the various aspects of GST on insurance, with a report from the GoM expected by the end of October. The GoM comprises members from different states, indicating a collaborative effort to evaluate and possibly recommend changes to the current GST rates for insurance products. Additionally, the Council's consideration of rate rationalization and compensation cess issues highlights the comprehensive approach being taken to address concerns within the insurance sector.