New Delhi [India], August 20 : Finance Minister Nirmala Sitharaman on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan.
"Everyone expressed that Life and Health Insurance (for individuals) should be exempted from GST. The GST Council will decide," said Bihar Deputy CM Samrat Choudhary, who was present at the meeting.
Telangana Deputy CM Mallu Bhatti Vikramarka also confirmed that the GoM proposed a complete exemption on health and life insurance for individuals.
Currently, both health and life insurance policy premiums attract 18 per cent GST.
During the meeting, the Union Finance Minister emphasised that the proposal by the Central Government is with a vision to usher in the next generation of GST reforms in India's journey towards becoming Atmanirbhar Bharat.
Union Minister of State for Finance, Chief Minister of Goa, Deputy CM of Bihar and Finance Ministers of States in the three GoMs were also present at the meeting.
The next GST Council meeting is likely to be held next month - September.
These reforms, proposed by the Central Government to the GoMs, are based on three key pillars:
Structural reforms: The reforms will correct inverted duty structures to cut input tax credit accumulation and boost domestic value addition, resolve classification issues for simpler compliance and fewer disputes and ensure stability & predictability in GST policy to strengthen industry confidence and long-term planning.
Rate rationalisation: The rate rationalisation exercise aims at providing greater relief to the common man, farmers, the middle class and MSMEs, while ensuring a simplified, transparent and growth-oriented tax regime. This would enhance affordability, boost consumption and make essential and aspirational goods more accessible to a wider population.
Ease of living: The upcoming GST reforms will ensure seamless, tech-driven and time-bound registration, introduce pre-filled returns to reduce errors and mismatches and enable faster, automated refunds, all aimed at simplifying compliance, supporting businesses and enhancing the overall ease of living and doing business.
"The Central Government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism," Ministry of Finance posted on X.
In the Independence Day speech from the ramparts of the Red Fort, Prime Minister Narendra Modi announced upcoming next-gen GST reforms before Diwali so as to benefit consumers, small industries and MSMEs.
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