In a significant development during today’s GST Council meeting, the much-awaited announcement on changes to the taxation of insurance premiums has been deferred. Sources close to the matter, cited by ET Now, confirm that the council postponed its decision after detailed discussions, citing the need for further evaluation.
Key Developments from the GST Council Meeting
- Insurance Premiums Taxation Deferment: The primary focus of the meeting was on a possible reduction in GST on insurance premiums, particularly for life and health insurance. Currently taxed at 18%, industry experts and stakeholders have been pushing for a reduction to make these essential services more affordable. However, no immediate changes were announced, with the council opting to defer its decision for further analysis on its revenue implications.
- Reason for Delay: The council is reportedly analyzing the fiscal impact of lowering GST on insurance. Reducing the GST rate could lead to a drop in government revenues, which needs to be balanced against the potential benefits of increased insurance coverage in the country.
- Other Announcements: The council took decisions on other pressing tax-related matters and clarified GST rates on specific services and goods. Additionally, steps to simplify GST compliance for small and medium enterprises (SMEs) were introduced.
- States’ Compensation Concerns: Several states voiced concerns over delayed GST compensation payments. The central government reassured them that efforts to resolve the issue are ongoing.
What’s Next?
While the decision on insurance premiums is delayed, the council is expected to revisit the matter in the coming months. The insurance industry and policyholders remain hopeful for a favorable outcome that could make life and health insurance policies more accessible and affordable.
Stay tuned for further updates as the GST Council continues its deliberations.
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