The Goods and Services Tax (GST) Council is considering exempting term life insurance premiums and health insurance premiums paid by senior citizens from tax, while also proposing rate changes for consumer goods.

A ministerial panel reviewing the GST rates on life and health insurance met on Saturday. It proposed exempting premiums for health insurance coverage up to ₹5 lakh for individuals other than senior citizens.

The GST Council will make the final decision on the matter.

Reacting to the development, Bengal chief minister Mamata Banerjee said on X: Our sustained efforts appear to be paying dividends — the central government looks like being further pressurised towards finally succumbing to our demands to withdraw/ modify the unjust 18 per cent GST on health and life insurance products/policies.

“I had personally written to the Union Finance Minister, warning how their decision to keep 18 per cent GST on health and medical insurances would deter vulnerable individuals from securing or maintaining their insurance coverage.”

Premiums for health insurance coverage exceeding ₹5 lakh will continue to be subject to an 18 per cent GST. Currently, all life insurance premiums, including term policies and family floater policies, are taxed at 18 per cent.

The GST on term life insurance premiums are likely to be exempted for all persons, including plans that consist of family members.

“The GoM members are broadly on board for cutting rates on insurance premiums,” said an official.

Bihar deputy chief minister Samrat Chaudhary said, “Every GoM member wants to give relief to people. Special focus should be on senior citizens.”

The GST Council, in its meeting last month, had set up a 13-member GoM to decide on the tax treatment of health and life insurance premiums. Chaudhary chairs the panel, which includes ministers from several Indian states.

The GoM on GST rate rationalisation on Saturday proposed lowering tax rates on a few items. The GoM also suggested hiking GST on shoes above ₹15,000 a pair and on wristwatches above ₹25,000 from 18 per cent to 28 per cent.

The rate changes, if approved by the GST Council, could lead to a revenue gain of ₹22,000 crore, officials said.

The GoM proposed reducing GST on packaged drinking water of 20 litres and above to 5 per cent from 18 per cent. If the GoM’s recommendation is accepted by the GST Council, the GST on bicycles costing less than ₹10,000 will be reduced to 5 per cent from 12 per cent.

GST on exercise notebooks will be reduced to 5 per cent from 12 per cent, the GoM proposed.