The much-awaited decision to reduce the Goods and Services Tax (GST) rate on health and life insurance premiums has been postponed by the GST Council in its 55th meeting, Bihar Deputy Chief Minister Samrat Chaudhary said on Saturday. Chaudhary, who chairs the Group of Ministers (GoM) on Rate Rationalization and Insurance Premium, said more details needed to be discussed and the next meeting of the Council of Ministers would be held in January before the proposal could be brought to the Council.
Chaudhary also said that a report on rate rationalization suggesting GST rate changes for 148 items was not submitted by the GoM during the ongoing 55th GST Council meeting in Jaisalmer. The decision to reduce the GST rate for food delivery through aggregators such as Swiggy and Zomato has also been postponed, sources said.
The GST Council meeting is still going on.
“For the report to be given by the GST GoM, many ministers were of the view that another meeting should be held. Whether it is group insurance, personal insurance or senior citizen insurance, we will have another meeting for this. We will discuss this in the next meeting,” Chaudhary said.
Sources said there was no consensus in GoM meetings on insurance premiums as some states were concerned about the revenue loss impact for states from the proposed cut in GST rates.
The GoM had earlier discussed GST exemption on premiums paid by senior citizens for health insurance and premiums paid by everyone for term life insurance. It was discussed to exempt GST on term life insurance premiums for all individuals including plans covering family members. A discount on health insurance premiums paid by senior citizens regardless of coverage was also under consideration. A health insurance discount of up to Rs 5 lakh was considered for other citizens. The existing rate of 18 percent would be continued for health insurance of more than 5 lakhs.
The council also discussed the clarification of ready-to-eat popcorn with salt and spices. The Council, in its deliberations, held that popcorn with salt and spices has essential characteristics of salt and if supplied in pre-packaged and labeled form, it would attract GST of 5 per cent (other than pre-packaged and labelled) and 12 per cent. However, popcorn infused with sugar (eg caramel popcorn) is a type of sugar confectionery (eg caramel popcorn), and hence, will attract 18 per cent GST.
The Council has recommended a reduction in the GST rate on fortified rice grains from 18 per cent to 5 per cent, sources said.
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