No GST Relief on LIC Premiums Yet: Finance Ministry Busts Viral Claim

No GST Relief on LIC Premiums Yet: Finance Ministry Busts Viral Claim

The Finance Ministry explains GST Revenue sharing in reply to the opposition’s call to cut GST on health and Life insurance. Finance Minister Nirmala Sitharaman stated that around three fourth of the revenue generated is transferred to the states. She also recommends that those who are protesting should direct their concerns to their respective state finance minister.

Firstly, The GST Council during its 54th meeting organized on September 9, 2024 in New Delhi. The council, considering the deliberations, approved to form a GoM, chaired by Shri Samrat Choudhary, Deputy Chief Ministry of Bihar, to inspect the case completely.

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The GoM in the 55th meeting of the GST Council held on December 21, 2024, in Jaisalmer, asked for more time to finalize it recommendations. The request has been acquire by the council, showing that additional decisions on the case will be established in the next report through GoM.

Right now, there is an 18% GST on LIC Premiums for most traditional policies, which stakeholders are worried about, claiming a lower tax burden on necessary financial protection products.

The GoM’s review result can give a method for tax relief in the insurance sector, specially for individual life insurance policyholders.

At Present, the Finance Ministry had denied any official proposal to eliminate GST on LIC premiums. PIB checked misleading reporting circulating and clarified that no such decision has been made yet.