The upcoming GST Council meeting on December 21 in Jaisalmer could bring significant relief to the common man, particularly in essential areas like healthcare and insurance. The council, chaired by the Union Finance Minister and comprising state finance ministers, is expected to discuss important tax-related decisions that could directly benefit households.
Possible Relief on Health and Life Insurance
One of the key topics on the agenda is the proposal to reduce or completely exempt GST on health and life insurance premiums. Currently, a 12-18% GST is levied on insurance premiums, making policies costly for middle-class families. A reduction in this tax would:
- Make insurance more affordable, encouraging more people to secure their health and life financially.
- Lighten the financial burden on families already struggling with medical costs or future security planning.
For instance, if GST on health insurance premiums is reduced from 18% to 5%, a policyholder paying ₹10,000 annually could save ₹1,300. Over time, this can lead to substantial savings.
Lower Tax on Daily Essentials
Another critical proposal is the reduction of GST rates on certain items from 12% to 5%, based on the recommendations of the state ministers’ committee.
- Items under consideration likely include healthcare products, packaged food, or other essentials.
- A lower GST rate would directly reduce the retail price of these goods, easing the monthly expenditure for families.
For example, if a household spends ₹5,000 monthly on GST-included items at 12%, a reduction to 5% could save them ₹350 per month — over ₹4,000 annually.
Focus on Rate Rationalization
The council may also review the overall structure of GST rates to simplify the tax system and reduce anomalies. This move could result in:
- Reduced costs for small businesses, enabling them to offer goods and services at lower prices.
- More disposable income for consumers, as savings from reduced GST are passed on.
Why This Matters for the Common Man
With rising inflation and increased costs of living, any reduction in taxes on essentials can offer much-needed relief. Whether it is:
- Making health and life insurance more accessible,
- Reducing grocery bills, or
- Lowering costs on everyday products,
these measures have a direct impact on the household budget, especially for the middle and lower-income groups.
Next Steps
If the council approves these proposals, they could come into effect in the coming months. This would align with the government’s broader goal of easing financial pressure on citizens and promoting economic growth through increased spending capacity.
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