After the GST Council meeting in September, a group of ministers was formed to consider the proposal to remove GST on health and life insurance premiums. This group has recommended exemption of health policy premiums, especially those of senior citizens, from GST.
Senior citizens may get good news soon. The Group of Ministers (GoM) has advised to abolish GST on insurance premium. The final decision on this will be taken in the GST Council meeting. After the 54th meeting of the GST Council in September, a group of ministers was formed to consider the proposal to exempt insurance premium from GST. This group has recommended abolishing GST on the premium of health insurance of all senior citizens and the premium of all health policies with a cover of up to Rs 5 lakh. It is said that the group of ministers has also advised to exempt all term life insurance premiums from GST. The next meeting of the GST Council is to be held in November.
Nitin Gadkari had written a letter to the Finance Minister
This matter started with a letter from Transport Minister Nitin Gadkari. He wrote a letter to Finance Minister Nirmala Sitharaman in July this year. In this, he had advised to abolish GST on the premium of life insurance and health insurance. However, this letter was confidential. But, it became public, after which the opposition seized the issue to take advantage of the opportunity. Former Congress president and senior leader Rahul Gandhi and Trinamool Congress’s Mamata Banerjee demanded the removal of GST on life and health insurance.
GST Council had formed GoM
After this, in the meeting of GST Council held in early September, it was expected that a decision would be taken to remove GST on health insurance premium. But, the Council decided to form a group of ministers in this regard. The Council believed that the GoM would give its advice after considering the issue in detail. Meanwhile, some states believed that after removing GST on insurance premium, insurance companies can keep its benefits to themselves. This means that they will not give its benefits to the customers.
A part of the population in India does not have access to insurance
Removal of GST on insurance premium will have a huge impact. Insurance in India is currently accessible to a very small part of the population. Insurance penetration in India is less than 4 percent. Insurance penetration shows how much part of the population of a country has insurance cover. Actually, this is the share of total insurance premium in the total GDP of the country. Insurance penetration in America is 11.7 percent. In England it is 11.1 percent. In South Africa it is 12.2 percent. Its global average is around 7 percent.
People are worried due to increase in health policy premium
After the Covid pandemic, the premium of health insurance has increased a lot. The reason for this is the high inflation of medical care. This means that the cost of treatment is increasing rapidly every year. The pace of health inflation is much higher than retail inflation. Due to the surge in health insurance, many people are facing difficulty in renewing their policy. Some people are requesting insurance companies to reduce coverage to reduce the premium. If GST on health insurance is abolished, it will provide great relief to people, especially senior citizens. The premium of health policy of senior citizens is very high.
