The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, has decided to establish a Group of Ministers (GoM) to review the tax rates on life and health insurance.

During the briefing on the 54th GST Council meeting’s outcomes, Sitharaman announced that the GoM will evaluate the current GST rates for these insurance sectors. The GoM is expected to submit its report by October, allowing the GST Council to consider the findings at its November meeting.

The GoM will be led by Bihar Deputy Chief Minister Samrat Choudhary, who is also currently leading the panel on GST rate rationalization.

“There were a lot of discussions about whether we should reduce the rate or exempt it, whom should we exempt and whom should not, what happens to group insurance; are we going to carve out only for senior citizens, will this not complicate the implementation?” Sitharaman told reporters after the meeting. The GoM will be submitting its report by October end, she said.

The 54th meeting of the GST Council on September 9, chaired by Finance Minister Nirmala Sitharaman, took several other decisions.

Also read: Good news! GST Council reaches ‘broad consensus’ on lowering tax on insurance premiums | Here’s all you need to know

Opposition leaders demand insurance premiums be exempt from GST

The issue of GST on insurance premiums was raised in Parliament by Opposition members demanding that health and life insurance premiums be exempt from the GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman, urging her to remove tax on insurance premiums.

In response to a discussion on the Finance Bill, Sitharaman highlighted that 75% of the GST revenue is allocated to states, and suggested that Opposition members should urge their state finance ministers to bring proposals to the GST Council.

Other major decisions at GST Council meet

Among other decisions taken at the GST Council meeting on Monday, the GST Council also agreed to lower the tax rates on cancer drugs from 12% to 5%, and reduce the tax on namkeens from 18% to 12%.

Additionally, Sitharaman announced that a Group of Ministers (GoM) will be formed to address issues related to the compensation cess, which is set to expire after March 2026.