Indian tax council agrees on need for lower tax on health and life cover premiums

By Shivangi Acharya

NEW DELHI (Reuters) - India's Goods and Services Tax council achieved consensus among its members on the need to lower the tax on health and life insurance premiums, officials said on Monday.

No decision was taken at the council meeting, but a panel of ministers will submit a report by the end of next month, and the council will discuss the issue again at a meeting November, Finance Minister Nirmala Sitharaman told a news conference.

The council is a body chaired by the finance minister who, along with other state ministers, decides on any changes to India’s indirect tax regime introduced in 2017.

India's 18% levy on health and life insurance premiums has been criticised on social media by some taxpayers who say it is wrong for the government to tax the uncertainties of life. A government minister came out against the tax in a letter leaked to the press.

A source familiar with the matter told Reuters that the government also plans to extend additional taxes on goods such as certain high end cars, tobacco products, aerated drinks and coal. The additional taxes are due to expire in March 2026 but will continue to be levied beyond that date, the source said.

(Reporting by Shivangi Acharya; Writing by Tanvi Mehta; Editing by David Goodman and Peter Graff)