New Delhi/Jaisalmer, Dec 21 (NationPress) The Goods and Services Tax (GST) Council convened on Saturday and decided to postpone the decision regarding potential rate reductions on life and health insurance premiums, as additional technicalities require clarification.

The long-awaited GST exemption or reduction on life and health insurance premiums has been a significant demand from the industry, as this change would help ease the tax burden on both insurers and policyholders.

According to reliable sources, during its 55th meeting held in Jaisalmer and chaired by Union Finance Minister Nirmala Sitharaman, the GST Council has decided to defer the decision concerning potential tax adjustments for insurance premiums.

While a majority of the members of the Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, advocated for a full exemption on health and life insurance policy premiums, some members proposed a reduction of the current rate from 18 percent to 5 percent.

“A few members indicated that further discussions are needed. The GoM is scheduled to reconvene in January,” Chaudhary informed reporters.

The GoM has recommended a GST exemption for premiums paid on term life insurance policies. Additionally, it was suggested that seniors should be exempt from GST on health insurance premiums.

For individuals who are not senior citizens, an exemption is recommended for health insurance premiums covering policies with a value up to Rs 5 lakh. However, the existing 18 percent GST rate will continue to apply for policies exceeding Rs 5 lakh in coverage.

The GST Council is expected to engage in further discussions regarding these recommendations in its upcoming meeting, as additional technical issues need to be resolved.

In the meantime, the GoM on GST compensation cess is anticipated to receive a six-month extension until June 2025 to present their report.

Another significant topic on the agenda is the potential retrospective application of the 5 percent GST on delivery charges by food delivery platforms starting from 2022. Currently, food delivery companies are not subjected to GST on these delivery charges. Furthermore, the GST Council is likely to address the inclusion of aviation turbine fuel under the GST framework.