The rally followed remarks from Bihar Deputy Chief Minister and GoM convenor on insurance, Samrat Choudhary, who said the proposal to exempt individual and family insurance policies from GST has been discussed and will be presented before the GST Council for approval.“Centre’s proposal is clear that for the insurance sector, individual and family (policies) should be exempt from GST. This has been discussed, and the GoM report will be presented to the Council,” Choudhary said.
Finance Minister Nirmala Sitharaman, who addressed the opening of the GoM meeting, urged states to deliberate collectively on the proposals.Telangana Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka said the GoM is likely to propose a full exemption.
“Overall loss for this will be ₹9,700 crore but still we need to be meticulous. Telangana is of the view that we should ensure that GST benefits are passed on to the consumers and not companies,” he noted.
Some states, however, expressed reservations, highlighting concerns over potential revenue loss and whether insurers will pass on the benefit of lower taxes to policyholders.
Brokerage Emkay Global said in a note that while the GoM recommendation raises questions over the scope of coverage and input tax credit implications, lower GST will likely reduce the cost of retail health and life insurance.
“Any benefits from GST cuts must be passed by insurers to customers,” the note added.
The GST Council will take the final call after wider consultations with states.
