The GST is applicable to life and health insurance in India also. Currently, policyholders are facing financial pressure due to GST and the government is considering reducing it. This article dives deep into the topic of GST on Life and Health Insurance along with recent updates in this sector.
GST on Life Insurance
For Life Insurance in India, the 18% GST Rate applies to the premium amount. The premium amount of life insurance contains the amount you pay for risk coverage and any other investment component.
GST on Health Insurance Premiums
Similar to GST on Life Insurance, Health Insurance Premiums are also taxed at 18%. For example, if your annual premium for health insurance is Rs. 10,000 then you have to pay additional Rs. 1800 due to GST. Thus, increasing the health insurance cost.
Learn More: What are the benefit for applying for the gst number in india
Upcoming Updates for GST on Life and Health Insurance
In recent meetings. The GST Council is moving closer towards a reduction in the tax or GST on life and health insurance premiums. The final decision is expected to be announced in November 2024. Thus, if GST on Life and Health Insurance premiums is reduced, it will help in bringing relief to millions of policyholders.
Impact of Reducing GST on Life and Health Insurance
Industry and the general public are welcoming the decision. Currently, the rising costs of medical insurance policies combined with GST are acting as a challenge and putting a financial burden on people’s pockets, especially senior citizens. Thus, lowering GST can ease the financial burden,
GST Registration for Insurers
Insurance companies are required to have GST Registration to legally collect and remit GST to the government. Whether the GST Rate is 18% or it gets lowered, the insurance businesses still need to get GST Registration and do GST Return Filing to claim input tax credits.
GoM to review tax rates on health and life insurance
The GST Council appointed a 13-member Group of Ministers (GoM) to evaluate the GST rates on health and life insurance premiums. They are scheduled to present their results by October 30.
The 54th GST Council meeting, held on September 9, decided to establish this GoM. Their responsibility is to analyze and evaluate the present tax framework for life and health insurance. Thus, the final decision regarding GST on insurance premiums will be decided at the next Council meeting in November, based on the GoM’s report.
Moreover, If you want any other guidance relating to GST Registration on readymade garments, please feel free to talk to our business advisors at 8881-069-069.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.