The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, is underway in Jaisalmer, Rajasthan. Sources reveal that discussions on the Group of Ministers’ (GoM) report regarding GST rates for the insurance sector have been deferred.

Bihar Deputy Chief Minister Samrat Chowdhary said that differences among GoM members led to the delay.

“The decision will be taken up in the next meeting,” he stated, adding that the GoM on insurance is likely to meet again in January for further deliberations.

The possibility of reducing GST rates on insurance premiums has been a topic of discussion for some time.

Finance Minister Nirmala Sitharaman recently addressed this in the Lok Sabha, mentioning that the council is considering forming a GoM to reassess the rates.

Krishnan Ramachandran, MD & CEO of Niva Bupa Health Insurance, earlier called for a reduction in GST on health insurance premiums to 5% from the current 18%.

He emphasised that a lower GST rate would improve affordability while maintaining industry sustainability.

However, he cautioned against a complete exemption from GST, arguing that it would remove the input tax credit (ITC) benefit for insurers, leading to higher operational costs.

In an earlier conversation with CNBC-TV18.com, Rajesh Kumar, Founder of Square Insurance, also highlighted operational cost pressures in the absence of ITC.

“Without the benefit of input tax credit, insurers—especially those serving rural areas—will face higher operational costs, making premiums less affordable. This is critical as rural health insurance coverage is already lower than urban areas,” Kumar noted.

The GST system, introduced in 2017, allows businesses to claim back the tax paid on inputs, enabling insurers to maintain competitive premiums.