GST 2.0 Overhaul: Govt Considers Reducing GST on Insurance from 18% to 5% or Nil

The government is considering a major overhaul of the GST framework, dubbed "GST 2.0," which could lead to a significant reduction in the tax on insurance premiums from the current 18% to 5% or even zero. This proposal, discussed in a Group of Ministers meeting, is part of a broader plan to rationalize GST rates into two primary slabs and simplify the tax structure. The move is aimed at making insurance more affordable and accessible to the public, thereby increasing penetration and consumption. While some states have expressed concern about potential revenue losses, there is a consensus that the benefit of a rate cut should be passed on directly to the policyholders.