GST Council to Discuss Taxation on Insurance Premiums and Online Gaming

The GST Council is set to meet on Monday to deliberate on key issues, including the taxation of insurance premiums, online gaming, and suggestions from the Group of Ministers (GoM) on rate rationalisation, according to sources.

A key focus of the meeting will be a report presented by the fitment committee, comprising Centre and state tax officials. The report will cover the impact of the Goods and Services Tax (GST) on life, health, and reinsurance premiums and its revenue implications. The Council will also discuss the possibility of reducing the GST burden on health insurance, which is currently taxed at 18%, or exempting specific groups, such as senior citizens, from paying the tax.

Calls to reduce or remove the GST on health and life insurance premiums have been raised by opposition members in Parliament and by Union Transport Minister Nitin Gadkari, who wrote to Finance Minister Nirmala Sitharaman on the matter. In her response to these calls, Sitharaman noted that 75% of the GST collected is allocated to the states and urged opposition members to take up the issue with their state finance ministers.

The GST Council, chaired by Sitharaman and made up of state ministers, will examine the recommendations. West Bengal Finance Minister Chandrima Bhattacharya had previously raised this issue in a GoM meeting, leading to its referral to the fitment committee for further analysis.

In the last financial year, ₹8,262.94 crore was collected through GST on health insurance premiums, while ₹1,484.36 crore was collected on health reinsurance premiums.

The Council will also review a "status report" on the GST levied on online gaming platforms, particularly following the October 1, 2023, implementation of a 28% tax on entry-level bets. This tax rate now applies uniformly to online gaming platforms and casinos, regardless of whether the game is based on skill or chance.

The Council's June 2023 meeting introduced several taxpayer-friendly measures, such as waivers of interest and penalties on GST demands from the first three years of the tax's introduction. Other decisions included setting monetary limits for tax officers to file appeals and reducing the pre-deposit amount required for taxpayers filing appeals under GST.

The Council's upcoming meeting will provide further clarity on these issues and may result in changes to GST rates in key sectors.