GST Council's Struggle to Lower Insurance Rates

The GST Council's efforts to reduce GST on term insurance and health insurance have hit a roadblock as several states remain unconvinced. Proposals to slash rates from 18% to 5% are met with resistance, particularly from states like West Bengal, Kerala, and Karnataka, who fear revenue losses.

The Council's Group of Ministers, led by Bihar's Deputy Chief Minister, is tasked with reworking these rates, but consensus remains elusive. The potential annual revenue loss is estimated at Rs 2,500 crore, a significant concern given the withdrawal of the compensation cess.

Additionally, enforcing the passing of tax benefits to consumers is unclear, as the anti-profiteering clause has been removed. Finance Minister Nirmala Sitharaman suggests market forces will handle this issue, but states remain skeptical.

Other agenda items include the taxation of food delivery services, a tax cut on cancer therapy, and clarifications on sponsorships and FSI.