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GST on Health Insurance to Reduce, Deadlock persist on Input Tax Credit
The awareness for health insurance has increased after Covid and to increase penetration, the central government is aiming at reducing the GST on health Insurance premium. However, deadlock persist on input tax credit.
During talks with Insurance companies Government has in principle agreed to reduce GST on health insurance policies from 18% to 5% without input tax credit. But Insurance Industry insists on input tax credit. Insurance companies are continuously demanding to reduce the burden of GST in health insurance premium.
According to insurance companies, 18% GST is a big hurdle in health insurance sale.18% GST on Health Insurance policies is hampering penetration. Industry says loss due to GST cut will be compensated with increased premium and high volume. Insurance Companies claims to bring the health insurance into 12% tax bracket with Input Tax credit.
There is an 18% GST imposed on life and health insurance currently. A high GST rate is not supportive of increasing the insurance penetration. The demand for reduction of GST on health insurance premium has been around for some time now due to the low penetration of health cover in India.
Source: Times Now
