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Insurers will no longer be able to claim input tax credit (ITC) on Goods and Services Tax (GST) paid on commissions and brokerage for individual health and life insurance policies from September 22, the Central Board of Indirect Taxes and Customs (CBIC) clarified on Tuesday.
The reduction in health insurance premiums is unlikely to match the 18% GST cut as insurers are expected to pass some of the costs arising from input taxes to customers.
The Centre has proposed exempting life and health insurance premium from GST, Bihar Deputy Chief Minister and convenor of insurance GoM Samrat Choudhary said on Wednesday.
With targeted reforms and incentives like the reduction of GST on Health insurance, we can unlock the true potential of insurance, ensuring wider coverage, encouraging innovation, and building a secure future for every individual and business, Universal Sompo General Insurance Managing Director and CEO Sharad Mathur said.
The Insurance Regulatory and Development Authority of India (IRDAI) is holding talks with the insurance industry to determine the optimal Goods and Services Tax (GST) rate that would allow companies to pass on tax benefits to policyholders, sources told CNBC-TV18.
The GST Council on December 21 again deferred a decision to exempt and cut taxes on health and life insurance premiums. The reason for this is that the ministers’ panel needs more time to reach a consensus on the matter.
The 55th GST Council meeting, set to take place soon, will examine and review the current Goods and Services Tax (GST) structure on life and medical insurance. The Group of Ministers (GoM) on Health Insurance presented its recommendations to revenue officials from both the state and central governments on December 16. The report will be reviewed by the GST Council during its meeting in Jaisalmer.
Industry experts expect a reduction in GST rates on health insurance at the forthcoming GST Council meeting on December 21, 2024. This could expand health insurance coverage; however, it may also raise concerns for insurance companies.
Recommendations of the Group of Ministers (GoM) looking into issues pertaining to GST on life and health insurance will be placed before the GST Council when received, Parliament was informed on Monday. The issue of exempting/reducing GST on life and health insurance was placed before the GST Council in its 54th meeting on September 9, 2024.
The revenue collected by the union government through Goods and Services Tax (GST) on healthcare and life insurance services surged by 680 per cent to Rs 16,398 crore in 2023-24 from Rs 2,101 crore in 2019-20, Minister of State for Finance Pankaj Chaudhary said in a written reply in Lok Sabha on Monday.