The Central Government of India can take a big decision regarding health and life insurance. It’s been speculating for a long time that the government may reduce a significant amount of GST from each insurance premium. If the government takes the decision, then many poor and middle-class families may take a breath of relief.
Important decision related to health and life insurance
As per some reports, the Narendra Modi government has been considering giving relief in the premium of health and life insurance for a long time. There is always speculation about this decision. The decision to reduce the 18 percent GST rate on both these insurance premiums can be taken in this meeting. Experts associated with this matter say that the most important issue of this meeting can be related to health and life insurance. The Group of Ministers (GoM) attending this GST meeting has already submitted its report on the rate of GST on both insurance. Some specific sources say that the GoM i.e. Group of Ministers has decided to remove GST rates on insurance up to Rs 5 lakh. However, experts are also telling that a decision can be taken to reduce the GST rate from the current level on insurance of more than Rs 5 lakh.
Government to reduce GST rate?
At present, 18 per cent GST rate is to be paid on both health and life insurance, but it is expected that the GST Council may decide to reduce it to 12 percent or its rate can be reduced even more. Many states have supported the government’s decision. These state governments have also agreed that health and life insurance security for the general public of the country should be considered.
Probable impact
However, there are many state governments who may be unhappy with this decision of the government. Some states have argued that if the central government reduces the GST rate from insurance, it can have a direct impact on the revenue of the state. It is also being said that if the government removes GST on insurance up to Rs 5 lakh, then it can affect revenue of about Rs 2100 crore. In such a situation, the government can find another way and decide to reduce the GST rate on 5 lakhs.