CM Mamata's proposal approved; Center exempts GST on life and health insurance premiums

The Central Government has approved Chief Minister Mamata Banerjee's proposal to exempt Goods and Services Tax (GST) on life and health insurance premiums. This decision was made during a meeting of the Group of Ministers, where it was agreed to remove GST from premiums of up to Rs 5 lakh for term life insurance and health insurance. A formal announcement is expected on Monday.

The exemption is designed to benefit senior citizens, who often face significant financial challenges related to insurance costs. During discussions, there was a consensus among ministers to consider exempting health insurance premiums for senior citizens from GST entirely, reflecting a focus on making essential services more affordable for this demographic.

In addition to the insurance changes, the Group of Ministers reviewed GST rates for various essential goods. Among the proposed adjustments is a reduction in GST on bottled water exceeding 20 liters from 18% to 5%. Similarly, the GST on bicycles priced below Rs 10,000 is likely to decrease from 12% to 5%, and exercise notebooks may see their rate cut from 12% to 5%. These changes aim to enhance affordability for consumers and make essential items more accessible.

The government's approach to rationalizing GST rates across different sectors indicates a commitment to alleviating financial pressures on consumers. By reducing the financial burden associated with insurance and essential goods, the government seeks to encourage participation in life and health insurance markets and support the overall financial well-being of consumers.