INSUBCONTINENT EXCLUSIVE:
GST relief on health insurance: Council likely to take up 4 options3 min read Last Updated : Sep 05 2024 | 11:38 PM IST
The Goods and
Services Tax (GST) Council in its meeting on Monday is likely to decide on four options regarding tax treatment of health insurance, with
request from the Department of Financial Services (DFS) to reduce taxes on health insurance products to make them more affordable and
full exemption for all health insurance premiums and reinsurance, or a reduction in the GST rate from 18 per cent to 5 per cent on health
these four proposals carries different financial implications: Rs 3,495 crore, Rs 1,730 crore, Rs 2,110 crore, and Rs 645 crore,
It recommended limiting the exemption to pure-term individual life policies and reinsurers, a suggestion that carries a likely revenue
insurance premiums in India during FY23 were Rs 90,032 crore, with the individual health insurance segment accounting for Rs 35,300 crore,
or 39 per cent of the total
At the current 18 per cent GST rate, the government collected Rs 6,354 crore on individual health insurance premiums.
The DFS argues that
reducing GST on health insurance would help address India's low insurance penetration by lowering premiums, encouraging more people to
the short-term loss in GST revenue, supporting the central government's efforts towards providing a minimum of social coverage net for every
There was already a pre-GST tax on medical insurance before GST was introduced
the GST levied on medical insurance.
Also, Union Minister of Road Transport and Highways Nitin Gadkari had written to Sitharaman to
remove the 18 per cent GST on life and medical insurance premiums
