On Tuesday, senior officials Ministry of Finance, Insurance Regulatory Development and Authority(IRDA) and insurers had met in Delhi to finalise the GST cut proposals before they are sent to GST Council, headed by Finance Minister Nirmala Sithraman that will take a final call on the move
Government and IRDAI officials have asked insurers to strictly pass on the GST cut benefits to policyholders
New Delhi: In a move, that would cheer the customers of Indian insurance industry, the government has now almost finalised the plans to reduce goods and services tax (GST) both in Term Life Insurance and Health Insurance from 18 per cent to 12 per cent with Input Tax Credit(ITC) and want insurers to pass on this benefits to the customers.
On Tuesday, senior officials Ministry of Finance, Insurance Regulatory Development and Authority(IRDA) and insurers had met here to finalise the GST reduction proposals before they are sent to GST Council, headed by Finance Minister Nirmala Sitharaman and comprising state counterparts, that will take a final call on the move.
Though, the details and technicalities of the GST reduction proposals are yet to be known, the government and the IRDAI officials were very particular that the benefits out of any GST reduction should be strictly passed on the policyholders.
The issue of loss of revenue to the central and state governments were also discussed on Tuesday meeting and the officials had said that the government is now prepared to forgo the revenue that will be benefitting the common man who of late is overburdened with exorbitant premiums, said sources, who have attended the meeting.
Sachin Jain, joint secretary (TRU-II) in the Central Board of Indirect Taxes and Customs(CBIC) in the Department of Revenue, Ministry of Finance, Mandakini Balodhi director (Insurance), Department of Financial Services, Ministry of Finance, a team of IRDAI officials headed by G Suryakumar, chief general manager(CGM),(Finance & Investment), officials from six life insurance companies including Life Insurance Corporation(LIC) and General Insurance Council had attended the meeting and have prepared the GST reduction proposals.
Earlier, at the 55th GST Council meet on Dec 21, 2024 in Jaisalmer, the Council, chaired by Sitharaman, had deferred the discussion on proposals for lowering GST rates on life and health insurance premiums.
They had wanted that some more technicalities needed to be ironed out and tasked the Group of Ministers (GoM) for further deliberations.
The GoM could not reach a consensus on insurance premiums, as several states had expressed concerns regarding potential revenue losses resulting from the proposed reduction in GST rates.
A GOM set up by the Council under Bihar’s Deputy Chief Minister Samrat Chaudhary, in its meeting in November had agreed on exempting insurance premiums paid for term life insurance policies from GST.
Also premium paid by senior citizens towards health insurance cover had been proposed to be exempted from the tax.
Besides, the GoM had said premiums paid by individuals, other than senior citizens, for health insurance with coverage of up to Rs 5 lakh is proposed to be exempted from GST.
However, 18 per cent GST will continue on premiums paid for policies with health insurance cover of over Rs 5 lakh, the GoM had recommended.
Now a days coverage of Rs lakhs is a meagre coverage. Every Insurance Companies talk about not less than Rs.10 lakhs coverage. Even any hospital, does not charge less than Rs 10 to lakhs, if a person is covered by health Insurance. So, the proposed cap upto 5 lakhs with lower GST seems to be absurd.
I am of the opinion that for seniors, for whatever coverage, no GST at all. Over 15 to 20 lakhs , same GST at 18%, though does not sound ok, be kept .
We, Senior Citizens, are afraid of taking any health insurance policy less then ₹5 lacs, because of exorbitant charges at Hospitals.
Whether Govt expects us to take two different policies for ₹5 lacs each?
Then there will be no GST?
We Senior citizens were waiting for some relief in GST for Health insurance but 18% will continue above 5 lakh cover.
It’s unjustified to even charge any GST on health insurance.
Are they suggesting you need to have 3 to 4 policies with different insurers. Please don’t complicate. Reduce the GST to 5% on health insurance and 12% on term. Instead Charge 5% GST on exempted hospital bills to neutralize revenue loss.
Senior citizens have hardly any source of income other than retirement benefits, if any. They are already struggling with health issues and on top of it they are further burdened 18% GST which is beyond their capacity. Govt needs to exempt medical insurance for senior citizen.
Govt has to abolish GST for health and term insurance sector. It is just like investment and govt has to put it under zero percent GST
There seems some ambiguity in the news report.
For health insurance of the persons other than Senior citizens, the GST rate for more than 5 lacs would continue @ 18%?
AND
The reduction to 12 % rate would apply to senior citizens for insurance more than 5 lacs Or
The senior citizens will be allowed full exemption from GST even if the insurance is more or less than 5 lacs.
Its a complicated issue. If GST is completely abolished on Health Insurance, the Insurers will tend to hike the premiums because they cannot claim any input tax credit on Nil GST, with the result, the buyers would be the sufferers in the form of higher premiums. Hence, going in for a lower GST with ITC for Insurers is a better option.
GST on Health insurance policy taken by Senior citizens (>60 years age) is to be fully exempted irrespective of the amount.
Infact, for senior citizens there should be no GST at all on health insurance policies. Why must they pay when their medical expenses hit through the roofs
In case of senior citizens, there is a strong case for total exemption from GST on their Health Insurance, irrespective of cover limit. Reduction of GST percentage from 18% to 12% that too upto cover limit of Rs.5.00 lakhs is too little and too late.
I sincerely feel atleast for senior citizens NO GST shall be applied whatever may be the amount of sum assured. Senior citizens are trying to reduce the burden on govt. by opting for self insurance. So why to punish them with GST? Honestly in my opinion there shall NOT be GST for term and health insurance for all ages and for any amount. It is afterall for self protection instead of depending on government.
By showing that gst will be reduced on policies upto Rs 5lakhs only the government is again trying to convince the public particularly senior citizens knowing fully well that Rs 5lakh policy is not sufficient. Infact no gst should be charged on insurance policies when government can’t provide universal health coverage for all .
It’s the policy holders who face the burden and it appears the Government yielded to the Insurance Companies pressure to continue with the Input credits at the cost of the gullible retail policy holders who pay the GST. The senior citizens and policy holders who do not have adequate pension benefits suffer the maximum. The sum insured is on an average a minimum of 10 lakh to have adequate protection and this results in no much tax benefits. The interests of the senior citizens who contributed their life by their hard work and taxes should at least deserve the full GST exemption if not free health care during their last years.
Over health insurance -& term policy of life Insurance GST should nill .
With the current scenario, Rs5 Lakhs is not enough to cover the medical expenses.There should not be any cap for reduction of GST.It should be reduced for all slab of coverage.
Insurance is not a luxury item. It is essential for any income earner. It is to be provided by the state. This important responsibility, it is addicting.
GST on insurance must be completely withdrawn.
Tax should be abolished from Health insurance & term life insurance,
GST on health insurance premium in respect of Senior Citizen should be exempted. Almost every family has Senior Citizen and we have to pay huge amount as general insurance premium which is a financial burden for common people like me. So I humbly request to Central govt.to exempt the GST on senior citizen’s health insurance premium.
Wise step for recommendations in respect of eliminating GST on Health policies of Senior Citizens. In fact this huge percentage of GST was affecting badly on the budget of Sr Citizens. Let’s hope and pray for run through of the proposal in GST Council Meeting.
It is absurd to restrict the lowering of GST on Health Policies upto sum insured of Rs05 lacs, it is simply an eye wash on the part of GOI, as Medical cost is exorbitant. GOI is befooling the insuring public. There should be no limit of Sum Insured if the GOI is really sincere to lower GST for benevolent cause.
Health insurance for senior Citizens, is a bare necessity. A large section of such senior citizens have to avail health Insurance cover at their cost. Increase in premium year after year and with 18% GST is rendering such cover increasingly unaffordable with attendant risks / consequences.
In this background, reduction of GST from 18% to 12% AND THAT TOO UPTO COVER LIMIT OF RS.5.00 LAkh provides hardly any relief to them
As such , Total waiver of GST irrespective of cover limit will alleviate hardships of senior citizens in some concrete way.
Whatever be health insurance policy. Or term insurance .there should not be GST. at all
Why a person should bear such huge amount on self insurance ? Cap of .5 lakh is totally absurd and of no use
GoM are not allowing this Benefit to common people who
Wishes to avail term insurance and Health insurance.
Reduction of GST with a insurance cap of Rs. 5.00 lakhs is hog wash considering the ridiculous sums hospitals charge these days even for basic treatments. The government is simply pulling wool over people’s eyes with this kind of nonsense.
The government needs to raise this cap to atleast Rs. 15 lakhs for non senior citizens.
For senior citizens the GST should be reduced to 5% irrespective of the amount insured.
Health insurance is a necessity, not a luxury, and plays a crucial role in ensuring access to quality healthcare. Given rising medical costs, a lower GST rate on health insurance premiums would encourage more people to secure coverage, ultimately reducing the dependency on government-funded healthcare facilities.
I kindly urge the concerned authorities to consider reducing the GST on health insurance premiums to make healthcare more affordable for all citizens. A lower tax rate will enhance insurance penetration, ensuring better financial protection against medical emergencies. Further,the reduction in GST will indirectly reduce the total premium to be paid for the Health Insurance. Then more people may take health Insurance. When more people are talking the health insurance the premium volume as well as GST will increase. Thereby government can compensate the reduction in GST.
It is actually the government’s responsibility to give free health insurance to seniors,then too we don’t mind covering ourselves, even here government wants a profit by taxing gst? They are talking about loss of revenue?. So any and everything be taxed !!
REMOVE GST FROM HEALTH INSURANCE & TERM INSURANCE FOR SENIOR CITIZEN IMMEDIATELY.
In addition to GST every year, insurance companies are increasing the renewal premium amounts by 50.to 60 percent on health insurance policies. No control over this by the government. No.asker no teller. Government should intervene in this and put restrictions on increasing premiums.
Within the limit of Rs15 to Rs 20 lakh, health covers for senior citizens should be fully exempted as these lower and middle class persons are not covered by any Govt. subsidized schemes like Aushman Bharat and free rations as they have a car or scooty..own house etc.
Its high time that country’s so called bosses shouldn’t hurt seniors who have struggled to cross this age barrier and are contributing with all capacities.
Very True sir, Government should consider common man’s interest
Very very bad news ..govt..look more greedy and illusive to serve needy people ..is it premium paid luxury products ?or necessary then why govt doesn’t want to zero everywhere they looting ..no basic services to people shame shame on all parties leaders this show what they want for common people..
I had written a detailed letter to Finance Minster, Neti Ayog, IRDA chairman with various suggestions as to how to reduce exorbitant premium on health insurance.
But I have not received any reply from them. Even abolition of GST on health insurance was one of the suggestions.
By charging huge GST amount on health insurance, govt is not allowing health insurance industry to grow.
Even in case of senior citizens, in whose prime age as there is no permanent income, charging of huge GST amount is not at all justifiable. So atleast in senior citizen case, no GST amount to be charged on any sum insured instead of putting cap of 5 lakh.
It is very sad to see that the govt is punishing the Sr citizens and making our lives miserable.. and feel like ending ourselves instead of hearing comments which kill us from the family. At our last stages, everybody including the family at one point or the other feel that that we are a burden for them, may not be verbal but actions speak louder than words.
I request the govt to remove all types of taxes for Sr citizens and let us die in peace..pls.
those availing health insurances and term insurances are already paying GST for all items required for survival. Additionally, majority are income taxpayers – where no benefit in tax exemption allowed in new regime allowed. Charging GST on health insurances and term insurance is absolute injustice to all taxpayers in the country.