In the GST Council meeting, it has been decided not to impose GST on all personal life and health insurance. Currently 18% tax is charged. New changes will save people money.
GST couricil meeting: The 56th meeting of the GST (Goods and Services Tax) Council was held on Wednesday under the chairmanship of Union Finance Minister Nirmala Sitharaman. Many decisions that relieved the common man were taken. A major decision was taken that the government would not take tax on personal life and health insurance. These will take 0% GST. This has brought great relief to the policyholders. Their money will be saved. Nirmala Sitharaman said that it will come into effect from 22 September.
18% GST on insurance services
Currently, insurance services have 18% GST. With new changes, all personal life insurance policies including term life, unit linked insurance plan (ULIP) and endowment plan will also come in 0 GST category. This exemption will be applied to all individual health insurance policies, including family floater and senior civilian schemes and also to their reins.
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What does 0 GST mean on insurance premium?
Till now, buying or renovating life or health insurance policy had to pay 18% GST on premium. For example, a policyholder with an annual premium of Rs 20,000 had to pay additional Rs 3600 as tax. Due to this, the person concerned on insurance was Rs 23,600.
With the new exemption, customers will now pay the original premium mentioned by insurance companies. They will not have to pay any tax. Industry experts say that this may reduce the effective cost of policies by about 15%. This will make them more accessible and the reach of insurance in the country will increase.
Also read- Modi government’s big decision on GST, 12% -28% slab ends, everyday goods will be cheap
Which other goods will not be charged?
The Finance Minister has said that no GST will be imposed on very high temperature milk, cheese and all Indian breads like roti, chapati and paratha. There will be 0 GST instead of 12% GST on 33 life saving medicines in the health sector. The GST rate has not been implemented on three important drugs used in the treatment of cancer, rare and long -term diseases.