A ministerial panel under the Goods and Services Tax (GST) has proposed tax relief for term life insurance premiums and health insurance for senior citizens. In a meeting on Saturday, most members of the panel supported exempting term life insurance premiums for all individuals, including plans covering family members. Additionally, health insurance premiums for senior citizens are likely to be GST-exempt. For other citizens, health insurance coverage up to Rs 5 lakh may also be exempted, while the 18% GST will continue to apply to coverage exceeding this limit.
Bihar Deputy Chief Minister Samrat Chaudhary, who is leading the Group of Ministers (GoM), emphasized that the focus is on providing relief, especially for senior citizens. A final decision will be made at the next GST Council meeting, expected in November or December.
The GoM also discussed a rate rationalization for various goods. Key items expected to see rate reductions include packaged water (above 20 liters), bicycles priced below Rs 10,000, and exercise books, with GST rates likely to drop from 18% to 5% for water, and from 12% to 5% for bicycles and exercise books. Conversely, luxury items such as shoes priced above Rs 15,000 and wristwatches costing over Rs 25,000 may see their GST rates increased to 28%.
The rate adjustments aim to boost revenue by Rs 22,000 crore, offsetting potential losses from insurance premium tax reductions.
