By laksh5382 
Sources said on Saturday that states have advocated waiver of premium paid on health insurance and term life insurance for senior citizens. The idea came to the fore during the Group of Ministers (GoM) meeting held here under the chairmanship of Bihar Deputy Chief Minister Samrat Chaudhary.
“Every member of the GOM wants to provide relief to the people. There should be special focus on senior citizens. We will submit a report to the council. The final decision will be taken by the council,” Chaudhary said without giving further details. Meanwhile, a GoM member said the idea has come up to waive the premium paid on health insurance for senior citizens and all policies with ₹5 lakh coverage. Similarly, the premium should be completely waived in case of term life insurance with family members, while GST rates for all other policies should remain at 18 per cent, the members said.
The GoM has to submit the report by October 30 and then the matter will be taken up by the GST Council in its meeting next month. As per the current status, the GST rate on premium for health insurance, term insurance plans and unit-linked insurance plans attracts 18 per cent GST. On endowment plans, GST is applied differently. While it is 4.5 percent on premiums paid during the first year, it is 2.25 percent from the second year onwards. For life insurance in the form of single premium annuity policies, the GST rate is 1.8 percent. The rates are the same for all age groups.
rate rationalization
Meanwhile, another GoM headed by Chaudhary agreed to recommend reducing the tax rates on 20-litre packaged drinking water bottles, bicycles and exercise notebooks to 5 per cent, but on expensive wrist watches and shoes. Suggested to increase taxes. This entire exercise will yield a revenue benefit of Rs 22,000 crore. “This will help cover the revenue loss from insurance,” an official said.
According to him, the GoM proposed to reduce GST on packaged drinking water of 20 liters and above from 18 per cent to 5 per cent. If the GoM recommendation is accepted by the GST Council, the GST on bicycles priced below ₹10,000 will be reduced from 12 percent to 5 percent. Additionally, the GoM proposed that GST on exercise notebooks be reduced from 12 percent to 5 percent.
The GoM also suggested increasing GST on shoes costing more than Rs 15,000 per pair and wrist watches above Rs 25,000 to 28 percent from 18 percent. Earlier, it had discussed changes in tax rates on over 100 items, including reducing taxes on some items from 12 to 5 per cent, to provide relief to the common man. Some items in the 18 per cent slab such as hair dryers, hair curlers, and beauty or make-up preparations which were taken up by the GoM may be returned to the 28 per cent slab.
The GST Council will consider the recommendation of the GOM. As of today, there are four major rates – 5, 12, 18 and 28 percent along with special rates such as 0.25 percent (rough diamond), 1 percent (affordable housing) and 3 percent (gold).