GST Council Meeting: Finance Minister Nirmala Sitharaman has announced that a new Group of Ministers (GoM) will be looking into the GST rates for medical health insurance. The GoM will be submitting a report on the same by the end of October.
Post-review, the GST Council will meet in November to take the final decision on the GST rate. The announcement comes as a relief to those who were hoping to see a reduction in the tax levels levied on medical health insurance. Meanwhile, the council has reduced rates on cancer drugs from 12 per cent to 5 per cent.
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The GoM will be headed by Bihar Deputy Chief Minister Samrat Choudhary, who is currently heading the panel on GST rate rationalisation.
Sitharaman said that new members would be joining the GoM to look into GST on health insurance.
The GoM will be submitting its report by October end, she said.
The issue of taxation of insurance premiums had figured in Parliament discussions with Opposition members demanding that health and life insurance premiums be exempt from the GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue.
Sitharaman in her reply to a discussion on the Finance Bill had said that 75 per cent of the GST collected goes to states and the Opposition members should ask their state finance ministers to bring the proposal at the GST Council.
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The GST Council in its meeting on Monday also decided to cut tax rates on cancer drugs to 5 per cent from 12 per cent and namkeens from 18 per cent to 12 per cent.
Sitharaman further said that a GoM will also be constituted to deal with the issue concerning compensation cess which will cease after March 2026.
The Council also deliberated on the GoM's status report on rate rationalisation and online gaming.
The minister further said that a committee of secretaries headed by Additional Secretary (Revenue) will be formed on the IGST which is currently facing a negative balance. It will look into ways to retrieve the money from states.
(With inputs from PTI)
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