Three key Groups of Ministers (GoMs) set up by the GST Council will convene on August 20-21 to deliberate on rate rationalisation, life and health insurance, and the compensation cess.
Their recommendations will be submitted to the GST Council ahead of a final decision expected before Diwali.
The GoM on rate rationalisation, likely to be headed by Bihar Deputy Chief Minister Samrat Choudhary, will examine a proposal to collapse the existing four-tier GST structure into two principal slabs of 5 percent and 18 percent. The 12 percent and 28 percent brackets would be eliminated, with most items under 12 percent moving into the lower or higher slabs. A select group of products would continue to attract a special 40 percent levy, designed to safeguard revenues.
Another GoM led by the Bihar Deputy CM will examine GST on life and health insurance. The panel is considering full exemption on premiums up to ₹5 lakh, particularly for policies benefiting senior citizens. At present, such premiums attract 18% GST. The proposed relief is estimated to cost the exchequer around ₹2,600 crore annually, though officials argue this would be offset by higher insurance penetration.
A third GoM chaired by Minister of State for Finance Pankaj Chaudhary will assess the future of the compensation cess, which was extended until March 2026 to help repay Covid-era borrowings. The cess, originally intended to cover states’ revenue shortfalls, may be phased out ahead of schedule, the report said.
Prime Minister Narendra Modi, in his remarks on Friday, underscored that upcoming GST reforms are aimed at easing the burden on the common man, farmers, the middle class and MSMEs.