The rates of Goods and Service Tax (GST) on health and life insurance is likely to be reduced, claimed reports.
According to CNBC-Awaaz, a proposal has been sent to the GST rationalization committee for the reduction of taxes. The proposal entails a 5 per cent GST on health and life insurance premium payments. This proposal is significantly lower than the 18 per cent GST applied currently. However, the committee is reportedly not in favour of the exemption of GST on premiums.
Earlier, on Thursday, Union Finance Minister, Nirmala Sitharaman reacted to the demand of Opposition regarding withdrawal of 18 percent GST on health and life insurance.
While speaking to media agency ANI, the Finance Minister said, “I think honourable member RSP MP NK Premachandran wasn’t rightly informed that work which has to be done through GDT Council cannot be done through bringing an amendment here (in Parliament). The Speaker did not take up the notice of amendment as the matters pertain to GST Council. This amendment has to first happen in GST Council.”
She further added, “We received a lot of inputs on the indexation issue after presenting the Budget. For the middle class, we are giving both option of computation of tax without indexation on realty transaction.”
The purpose of reduction of GST was given by Union Minister for Road Transport and Highways Nitin Gadkari. The minister took up the matter after receiving a memorandum on the issue from the ‘Life Insurance Union’ of Nagpur – the Parliamentary constituency he represents in the Lok Sabha.
Nitin Gadkari, in a letter to the Finance Minister stated that the “main issue raised by the union is related to withdrawal of GST on Life and Medical Insurance Premium”.
His letter mentions that the 18 per cent GST currently levied on life and medical insurance premiums tends to penalise individuals seeking to protect themselves and their families against life’s uncertainties.