 "Finance Minister Nirmala Sitharaman announces key GST reforms, including a GoM to reduce insurance taxes and lower rates on cancer drugs.")
During the 54th GST Council meeting, Union Finance Minister Nirmala Sitharaman announced the formation of a Group of Ministers (GoM) to evaluate the GST rates for life and health insurance. This GoM will be led by Bihar Deputy Chief Minister Samrat Choudhary and is expected to submit its report by the end of October 2024. Additionally, the Council decided to reduce the GST on cancer drugs from 12% to 5% and on namkeens from 18% to 12%. Sitharaman also highlighted ongoing discussions about the compensation cess, set to expire after March 2026, and the challenges related to the Integrated Goods and Services Tax (IGST) currently facing a negative balance.
The recent GST Council meeting, headed by Finance Minister Nirmala Sitharaman, has made significant decisions aimed at easing the tax burden on health-related services. On September 9, 2024, the council announced the formation of a Group of Ministers (GoM) that will focus on lowering the Goods and Services Tax (GST) rates on life and health insurance. This GoM will be chaired by Bihar’s Deputy Chief Minister, Samrat Choudhary, who is already leading initiatives for GST rate rationalization.
During the press conference, Sitharaman explained that the GoM’s findings are expected to be presented by the end of October 2024. This move follows discussions in Parliament where members of the Opposition voiced concerns over the high taxation on health and life insurance premiums. Additionally, the council has agreed to reduce the GST on cancer drugs from 12% to 5% and cut the tax rate on namkeens (snacks) from 18% to 12%.
The council is also working on addressing issues related to the compensation cess, which is set to end in March 2026, and a committee led by the Additional Secretary (Revenue) will examine how to manage the Integrated Goods and Services Tax (IGST) to fix its current negative balance. These developments are crucial for many consumers and healthcare initiatives in India, as they indicate a move towards more affordable health insurance and treatments.
Tags: GST Council, Finance Minister Nirmala Sitharaman, health insurance, cancer drugs, tax rates, India news, GST reforms.
What is the 54th GST Council meeting about?
The 54th GST Council meeting is discussing changes in the Goods and Services Tax (GST) system, particularly focusing on rates for life and health insurance.
What is a GoM?
GoM stands for Group of Ministers. It is a small committee of ministers set up to discuss specific issues and come up with recommendations for the larger council.
Why are changes needed for insurance rates?
Changes may be needed to ensure that the tax rates on life and health insurance are fair and help make these services more affordable for people.
How will the GoM impact insurance policyholders?
The GoM will review and recommend changes that could either lower or adjust the tax rates, potentially making insurance policies less expensive for consumers.
When can we expect updates from the GoM?
Once the GoM completes its review and makes recommendations, the GST Council will discuss and possibly implement the changes, but there is no fixed timeline for this yet.
