In the coming time, many major changes are going to come in GST, in which there can be a big benefit in health and life insurance premiums. The government is preparing to make GST rates easier and rational. Meanwhile, a special Group of GST Council has suggested that health and life insurance premiums should be given completely exemption from GST. If this proposal is approved, then the common people can get a big relief from this tax burden.
What is GST 2.0 Reform?
The aim of GST 2.0 reform is to make the country’s GST system better, easy and beneficial for all. Finance Minister Nirmala Sitharaman has said that this improvement will benefit farmers, middle class and small traders. Prime Minister Narendra Modi also described this reform as the gift of Diwali in the Independence Day speech.
The government plans that only two slabs and 18% should be kept by eliminating several GST rates. Along with this, a high GST rate of 40% will be applicable on some items like cigarette and luxury car.
What will be the change on health and life insurance?
So far, 18% GST is imposed on health and life insurance premiums. But the Group of Ministers has suggested that it should be completely freed from GST. This would mean that now you will not have to pay 18% tax on purchasing insurance policy, due to which the premium will be cheaper and more people will be able to take advantage of it.
The meeting was held under the chairmanship of Bihar Deputy Chief Minister Emperor Chaudhary, in which a strong consensus was made in favor of this exemption. However, some states are concerned whether the benefit of this exemption will reach customers directly from insurance companies. Because insurance companies will not get input tax credit on this. The Group of Ministers also paid attention to this and has asked the GST Council to remove any such way from which this benefit should reach the general public.
What will be the benefit of GST reform?
After this improvement, the tax system can be more simple. The Finance Minister said that this change will promote domestic production and help the country to become financially self -sufficient. Also, consumers will be able to get essential goods and services easily and at a lower price. Now the Group of Ministers will submit its report to the GST Council, which is going to be received in September. In the council, the ministers of the states and the Center will take a final decision. Decisions of changes in rates and exemption will be taken in this meeting.