GST Council likely to meet at December-end, tax relief for health, life insurance on cards

The pre-budget consultations are also expected to address a range of economic challenges that will shape the Union Budget 2025-26.

The GST Council will likely take up tax relief on health and life insurance premiums on December 23 and 24 when it meets next. The meeting was earlier expected in November but was now being aligned with union finance minister Nirmala Sitharaman’s pre-budget consultations with state counterparts, sources said.

With Budget preparations on, the December meeting with states will focus on pressing issues such as food inflation, unemployment, rural job creation, and capex momentum.

“Earlier, the finance minister had indicated that the GST Council meeting would be held in November, but it’s now set for December-end, coinciding with the pre-budget meetings with state finance ministers to gather suggestions for the Union Budget,” a government official told Moneycontrol on condition of anonymity.

The convergence of budget planning and GST policy discussions is likely to sharpen focus on challenges while also offering relief for health and life insurance policies, a government official said.

Both the meetings are likely to be held in Rajasthan’s Jodhpur or Jaisalmer.

One of the most anticipated outcomes of the GST Council meeting is full exemptions on term life insurance premiums and health insurance premiums for senior citizens.

Life and health insurance premiums are taxed at 18 percent, which significantly raises the cost for policyholders.

To ease the burden, the Group of Ministers (GoM) on GST has recommended exemptions that would impact a broad swath of the population, particularly seniors and those seeking basic term life coverage.

The GoM has proposed a full GST exemption on premiums paid for term life insurance, covering individual policies and associated family members.

It has also suggested a complete exemption for health insurance premiums for senior citizens, regardless of coverage limits, and partial relief for others, with an exemption for policies with up to Rs 5 lakh coverage.

Exempting term life insurance alone is estimated to cause a revenue loss of around Rs 200 crore, which the government anticipates would be offset by proposed changes to GST on other items.

In addition to the insurance exemptions, the GST Council is set to review rate adjustments on both luxury goods and essentials.

Proposals to increase GST on high-end items like luxury wristwatches and shoes are on the table, to bolster revenue by an estimated Rs 22,000 crore annually.

GST on essentials such as bicycles, exercise books, and large packs of packaged drinking water could be lowered to ease household expenses.

The pre-budget consultations are expected to address a range of economic challenges that will shape the final document 26. Job creation, especially in the rural economy, MGNREGA spending, housing, water, agriculture and a pro-industrial approach to attract private investments will be in focus.

The meeting has state finance ministers and senior officials from union territories making suggestions to lower food prices while sustaining growth.

"The finance minister will lead pre-budget consultations with finance ministers from states and union territories, focusing on ways to drive growth, control inflation, and support rural job creation," the official said.