GST Relives on Insurance: IRDAI Backs Proposal, GoM to Meet in April

The Insurance Regulatory and Development Authority of India (IRDAI) has submitted its recommendations concerning Goods and Services Tax (GST) relief on life and health insurance premiums. This development paves the way for the Group of Ministers (GoM) on insurance to reconvene in April to finalize their proposals. The GST Council is anticipated to deliberate on these recommendations in its forthcoming meeting, likely scheduled for late April or early May.

Previously, the GoM had proposed significant changes, including a full exemption of GST on pure term life insurance policies and a reduction of GST rates on individual health insurance premiums from the existing 18% to 5%. These measures aim to enhance the affordability and accessibility of insurance products, particularly for vulnerable sections of society.

The GoM, led by Bihar's Deputy Chief Minister Samrat Chaudhary, will finalise its report after reviewing the comments from IRDAI. The GST Council had previously deferred a decision on exempting or reducing GST on health and life insurance premiums at its meeting on December 21, awaiting further input from the regulator.

The insurance industry and policyholders alike are hopeful that these tax concessions will lead to reduced premium costs and increased insurance penetration across the country. The final decisions by the GoM and the GST Council in the coming months will be pivotal in shaping the future landscape of insurance taxation in India.