By Vineet Kumar 
GST Council Meeting Set for December-End, Potential Tax Relief on Health and Life Insurance
The upcoming GST Council meeting, initially expected this November, has been postponed to align with Union Finance Minister Nirmala Sitharaman’s pre-budget consultations with state finance ministers. Scheduled for December 23-24, this meeting is expected to address several pressing issues, including potential tax relief on health and life insurance premiums.
Focus Areas of the December Meeting
The meeting, likely to be held in Jodhpur or Jaisalmer, Rajasthan, will coincide with ongoing Budget preparations. Key economic concerns such as food inflation, rural employment, and capital expenditure momentum are expected to dominate discussions, with a particular emphasis on challenges faced by the rural economy and ways to boost job creation and economic growth.
Sources report that combining budget planning with GST policy deliberations aims to prioritize solutions for these critical areas. “The finance minister will lead pre-budget consultations with her counterparts from states and union territories, focusing on ways to drive growth, control inflation, and support rural job creation.
Potential GST Exemptions on Insurance Premiums
One of the key topics of interest in this GST Council meeting is the proposal to exempt certain health and life insurance premiums from GST. Currently, life and health insurance premiums are taxed at 18%, significantly raising policy costs for consumers.
The Group of Ministers (GoM) on GST has proposed a complete exemption for term life insurance premiums, covering individual policies and their families, and full exemption for senior citizens’ health insurance premiums, regardless of coverage limits. Additionally, for others, partial relief is suggested, with an exemption on policies offering coverage up to Rs 5 lakh.
While these exemptions could bring significant relief, particularly for senior citizens and those seeking basic life insurance, they also pose a revenue loss estimated at around Rs 200 crore, which the government plans to offset through adjustments to GST rates on other items.
Adjustments for Luxury Goods and Essentials
Alongside potential insurance relief, the GST Council is also considering rate changes for both luxury goods and essential items. Proposals suggest increasing GST on high-end items, including luxury wristwatches and shoes, to boost revenue by an estimated Rs 22,000 crore annually.
Conversely, to reduce household costs, the Council may lower GST on essentials such as bicycles, exercise books, and large packages of drinking water.
Broader Budget Consultations
The pre-budget consultations accompanying the GST Council meeting will address a broad range of economic priorities that will shape the 2024-2025 Union Budget. Job creation, particularly in rural areas, housing, MGNREGA spending, water, agriculture, and private investment incentives are expected to be focal points.
State finance ministers and union territory representatives are anticipated to bring suggestions on reducing food prices while sustaining growth.
The convergence of these meetings is expected to streamline budgetary and GST policies, offering insights into addressing inflation and boosting the economy. The resulting policies and budget recommendations will likely reflect these pressing economic challenges and the government’s approach to tackling them.