You will get a gift in the new year, GST may be abolished!
In the new year 2025, you may get the gift of reduction in GST on life insurance and health insurance. A meeting is going to be held with the finance ministers of the states in rajasthan on 21-22 december 2024 under the chairmanship of Finance minister Nirmala Sitharaman. In this two-day meeting, on one day the Finance minister will take suggestions and recommendations from the Finance Ministers of the states regarding the budget before the financial year 2025-26 and on one day the 55th meeting of the GST Council will be held in which a decision can be taken to reduce GST on health insurance along with life insurance.
In the upcoming meeting of the GST Council, the 18 percent GST levied on term insurance plans may be completely abolished. At the same time, GST can be abolished for senior citizens and other people who buy health insurance up to Rs 5 lakh. PTI quoted an official as saying that the GST Council may rationalize GST rates on some products and services and reduce GST rates on some items from 12 per cent to 5 per cent.
The group of ministers formed to consider GST on health and life insurance has agreed to abolish GST on term insurance and exempt health insurance for senior citizens from GST. Apart from this, there is also a proposal to abolish GST on premium payment by individuals on health insurance up to Rs 5 lakh. However, 18 per cent GST will continue to be levied on health insurance premiums above Rs 5 lakh. In the GST Council meeting held in september 2024, the group of ministers was asked to submit a report.
The group of ministers formed to rationalize the GST rate has suggested changes in GST rates on packaged drinking water, bicycles, exercise notebooks, luxury wristwatches and shoes. This change in GST rate will give the government a revenue benefit of Rs 22000 crore. The GoM has proposed to reduce the GST rate on 20-litre packaged drinking water from 18% to 5%, on bicycles below Rs 10000 from 12% to 5%. There is also a proposal to reduce the GST rate on exercise notebooks from 12% to 5%. While the GST rate on shoes costing more than Rs 15000 has been proposed to be increased from 18% to 28%, and on watches costing more than Rs 25000 from 18% to 28%.