The issue of GST on health insurance premium has been hot for a long time. Now only one day is left for this to be put to rest. The GST Council meeting is to be held on Monday i.e. 9 September. After this meeting it will be clear whether there will be exemption from GST on health insurance premium or not.
If the GST rates on health insurance premium are reduced or abolished, then health insurance will become cheaper for crores of people in the country. However, on the other hand, this will also affect the government's earnings. In such a situation, everyone is eagerly waiting to see what decision the GST Council will take in this meeting.
There is a fitment committee under the GST Council. This committee has been considering changes in GST rates on health insurance premiums for a long time. Revenue officials from both the central and state governments are also included in this committee. The committee has presented several suggestions to the GST Council, although the final decision is in the hands of the council.
At present, policy holders have to pay 18% GST on health insurance premium. Whereas there is a demand from the government that either GST should be abolished on this or this rate should be reduced to 5%.
About a month ago, Union Minister Nitin Gadkari had requested Finance Minister Nirmala Sitharaman to exclude medical insurance premium from the ambit of GST. On Friday, September 6, the Karnataka government appealed to the Center to reconsider the imposition of 18% GST on health insurance for lower and middle income group policyholders.
West Bengal CM Mamata Banerjee has also requested the Council to provide relief to the common people by removing GST.
According to a Times of India report, a state finance minister said that "officials are looking for options that can help the holders. However, one of our concerns is that insurance companies can keep the profits for themselves and this will not benefit the health insurance buyers."
While another minister said, “In the meeting, the minister will try to give such a formula which will reduce the burden on consumers and will also ensure that the profit does not go in the pockets of the companies.”
