Health insurance GST: Indian states may be blocking the way for a big tax relief

economictimes.indiatimes.com:

tax burden on health and life insurance policies. However, the proposal to lower GST on insurance premiums is meeting resistance from several states, which fear a significant loss of revenue, particularly from medical insurance, ToI reported.

Also Read: Indians may need to get over a tax headache to secure their health

Push for Lower GSTon Health Insurance

The debate around the tax on health insurance gained momentum after Union Transport Minister Nitin Gadkari urged the Finance Ministry to scrap GST on health insurance. In his letter, Gadkari highlighted the increasing financial burden on policyholders due to the consistent rise in insurance premiums, which often climb by 10 to 20 percent annually. This surge, he argued, adds strain on Indian citizens, particularly senior citizens, who are either retired or dependent on their savings for survival.

Also Read: Gadkari's letter seeking removal of 18% GST on health insurance premium was released without permission, Sitharaman tells

As medical costs continue to rise, many in India question why a service as essential as healthcare is taxed so heavily. In a country with significant income inequality and a healthcare system in need of improvement, health insurance is often seen as a necessity rather than a luxury. Despite this, India’s insurance penetration remains relatively low, and the added tax on health insurance only exacerbates the financial challenges faced by those seeking medical coverage.

Nitin Gadkari calls for GST reduction on flex