Mon Sep 09 16:04:00 UTC 2024: ## GST Council to Decide on Insurance Tax in November

**New Delhi:** The Goods and Services Tax (GST) Council will take up the crucial issue of GST on insurance products at its next meeting in November, with a decision on potential rate reduction or exemption expected by then.

A Group of Ministers (GoM), set up on Monday, will study the matter and submit a report by the end of October. This GoM, headed by Bihar Deputy Chief Minister Samrat Choudhary, will focus on both life and health insurance, including various aspects like group insurance for residents’ welfare associations, the distinction between pure life and term insurance, mental health insurance, and senior citizen insurance.

Finance Minister Nirmala Sitharaman emphasized the need for further analysis and discussions on these complex issues.

The current 18% GST on insurance has faced growing pressure for withdrawal or reduction. While the GoM is expected to recommend a decision on a lower rate or exemption for health insurance, industry experts like MS Mani of Deloitte India emphasize the need for clarity on all forms of health insurance, including family floaters, group policies, and optional add-ons.

The Council also discussed rate rationalization, with further deliberations planned in upcoming meetings. Another GoM has been formed to assess the future of the compensation cess, which is set to expire in March 2026.

Other significant decisions include:

* **Airline Relief:** Exemption of GST on the import of services by foreign airlines operating through branch offices in India.
* **Cancer Drug Relief:** Reduction of GST rate on certain cancer drugs to 5%.
* **Research and Development Exemption:** GST exemption recommended for research and development services provided by government entities and institutions using government or private grants.
* **B2C E-Invoicing Pilot:** A pilot program for B2C e-invoicing will be implemented following the success of B2B e-invoicing.

The Council also reported a significant increase in revenue from online gaming, casinos, and horse racing since the introduction of a 28% GST on these sectors.

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