New Delhi, October 19: The Goods and Services Tax (GST) on health insurance premiums paid by senior citizens may soon be exempted, according to an official statement.
The Group of Ministers (GoM) met to discuss rate rationalisation and proposed exempting GST for health insurance premiums up to ₹5 lakh, except for senior citizens.
Currently, a GST rate of 18% applies to both life insurance premiums and health coverage exceeding ₹5 lakh. The final decision on these changes will be taken by the GST Council.
In addition to insurance, the GoM discussed rate cuts on consumer goods like packaged drinking water, bicycles, and exercise notebooks. Bicycles costing under ₹10,000 and exercise books could see a reduction in GST to 5% from the current 12%.
Meanwhile, luxury items like shoes above ₹15,000 and wristwatches above ₹25,000 might be moved to the highest GST slab of 28%. This rate rejig is expected to help the Centre and states recover ₹22,000 crore in revenue to offset the reduced GST on insurance premiums.
The GoM will continue deliberations on merging GST slabs and further rate revisions.