Big bang in GST 2.0… By waiving the tax on health and life insurance, the general public will get the biggest gift ever.

Business News: The GST Council's ministerial group has suggested that health and life insurance premiums be exempted from tax. Till now, 18% GST is levied on these. Insurance will become cheaper if an exemption is given, and the benefit for the general public will increase. The number of people taking insurance policies may increase. The government is linking it with social security. If these reforms are implemented, crores of families will get relief. The government is going to simplify the rates in GST 2.0.

The plan is to keep only two slabs, 5% and 18%. There will be a 40% tax on things like cigarettes and luxury cars. Finance Minister Nirmala Sitharaman said that these changes will provide relief to farmers, small businessmen, and the middle class. Prime Minister Narendra Modi called it a Diwali gift.

Impact on insurance premium

If the suggestion is implemented, then the 18% tax will not have to be paid on buying an insurance policy. This means that health and life insurance premiums will be much cheaper. This will benefit the middle class, elderly, and youth. More people will be attracted towards taking insurance. Pressure will increase on companies to pass on this benefit directly to the customers.

Consensus reached at the meeting

A meeting was held under the chairmanship of Bihar Deputy Chief Minister Samrat Chaudhary. Most of the states agreed in favor of tax exemption. However, some states are concerned about whether the full benefit of tax exemption will reach the customers or not. The group of ministers said that a solution will be found for this too. The path will be cleared by submitting a report to the GST Council.

Relief to the public

It has been seen many times that companies keep the benefit of tax exemption to themselves. The group of ministers has clearly said that this should not happen this time. Clear rules will be made to provide direct benefits to the customers. The common man hopes that the government will be kind to them. This step is also being linked to social justice and fairness.

What will be the benefit of the reform?

After the GST 2.0 reform, the tax system will become simpler. Domestic production will increase, and the dream of a self-reliant India will be strengthened. Essential goods and services will reach the general public at a lower price. This will also increase employment and business. The government wants GST to become a reliable and fair tax system for the public.  

What will be the decision next?

Now the Group of Ministers will submit its report to the GST Council in September. It will take a final decision on which rates will be removed and which items will get exemption. If this proposal is passed, the public will get direct benefit in the coming months. Removal of tax on services like insurance will be a historic change in economic policies.