Nirmala Sitharaman, Union Finance Minister
Responding to a question ’ on whether it is time to rationalise GST rates and slabs, Sitharaman said ”that work has almost reached a finale”.
Mumbai: In an Indication that the GST rates on Health Insurance and Term Life Insurance may be falling soon, Finance Minister Nirmala Sitharaman on Saturday said the GST rates will come down further and the work on rationalising tax rates and slabs has “almost reached a finale”.
She said that the revenue neutral rate (RNR) has come down from 15.8 per cent at the time of the launch of GST on July 1, 2017, to 11.4 per cent in 2023.
”It will come down even further down,” the minister added.
According to sources, the government has now almost finalised the plans to reduce GST rates both in Term Life Insurance and Health Insurance from 18 per cent to 12 per cent with Input Tax Credit(ITC) and want insurers to pass on this benefits to the customers.
Senior officials Ministry of Finance, Insurance Regulatory Development and Authority(IRDA) and insurers had met in New Delhi recentyl to finalise the GST reduction proposals before they are sent to GST Council, headed by Sitharaman and comprising state counterparts, that will take a final call on the move.
Though, the details and technicalities of the GST reduction proposals are yet to be known, the government and the IRDAI officials were very particular that the benefits out of any GST reduction should be strictly passed on the policyholders.
The GST Council, headed by Sitharaman and comprising her state counterparts, in September 2021, set up a group of ministers (GoM) to rationalise GST rates and suggest changes in slabs. The GoM comprises finance ministers of 6 states.
Responding to a question at ’The Economic Times Awards’ on whether it is time to rationalise GST rates and slabs, Sitharaman said ”that work has almost reached a finale”.
”Now, at this stage, there is one more look that I would (take) the groups (GoM) have done excellent work, but I still have taken it upon myself to, once more, completely review each of the groups’ works, and then probably take it to take it to the Council to see if we can come to a final conclusion on this,” she said.
To a question on the reasons for stock market volatility and how the path towards more calm markets playing out, Sitharaman said, ”It is like asking will the world be calm, will the wars come to an end, will the Red Sea be safer, will there be no sea pirates. Can I comment on it or any of you can comment”.
On public sector banks’ stake dilution, Sitharaman said the government is committed to increasing the public float.
”We want to have more retail investors in public sector banks,” she said.