INSURANCE
No proposal under consideration to reduce GST on health insurance premium: Bhagwat K Karad
Dec-07-2021

Minister of State for Finance Bhagwat K Karad has said there is no recommendation under consideration of the GST Council to reduce Goods and Services Tax (GST) on health insurance premium. Karad said the GST levied on health insurance premium is 18 per cent. He said ‘the rate of GST is decided on the recommendations of the GST Council, which is a constitutional body comprising members from the central government and state governments. At present, no recommendation to reduce the GST rate on health insurance premium is under consideration of the GST Council’.

He said expansion of health insurance on commercial basis lies in the domain of insurers, which draw up their business and growth strategies with the approval of their respective boards, and economies of scale from such expansion help bring in cost efficiencies. He added strengthening of regulatory mechanisms for policyholder protection is a function vested by the Insurance Regulatory and Development Authority Act, 1999 in the insurance regulator, which reviews regulations on an ongoing basis in light of the experience of their working and the needs of insurance industry.

He also noted ‘While public health is a state subject and accordingly the state governments primarily draw up public health interventions from time to time, the central government has launched Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana as a centrally sponsored scheme for an annual family health cover of Rs 5 lakh for 10.74 crore families (approximately 50 crore beneficiaries), thereby massively expanding health insurance coverage’.

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