Key Points

The meeting was held in the presence of Union Finance Minister Nirmala Sitharaman and brought together finance ministers and senior representatives from various states.

In a post on social media platform X, Sangma wrote: "Participated in the Group of Ministers (GoM) meeting to deliberate on the proposed GST levy on life and health insurance, in the esteemed presence of Hon'ble Union Finance Minister, Smt. @nsitharaman ji."

The discussions are seen as significant in view of concerns raised by several states and stakeholders over the potential impact of higher taxation on essential financial protection products.

Life and health insurance have emerged as vital tools for financial security, particularly after the Covid-19 pandemic underscored the need for wider health coverage.

However, there has been an apprehension that an additional GST burden could discourage policyholders, especially middle-class families, from availing insurance.

Officials present at the meeting said deliberations focused on striking a balance between revenue considerations for the exchequer and the need to keep insurance products affordable for the public.

While some states have backed the Centre's proposal citing the need for uniform tax treatment, others, including representatives from smaller states, stressed that affordability must remain the top priority.

Chief Minister Sangma, who has consistently advocated for people-centric fiscal policies, is understood to have voiced the concerns of smaller states and highlighted the necessity of safeguarding citizens' access to life and health insurance.

The GoM will reportedly compile its recommendations and submit them to the GST Council for further consideration. A final decision on whether to impose, modify, or defer the proposed GST levy is expected to be taken in the upcoming Council meeting.

The outcome of these deliberations could have wide-ranging implications for India's insurance sector, which is striving to expand penetration in both urban and rural markets.

- IANS