Aakhir Tak – In Shorts
GST on Insurance Premium: India imposes an 18% GST on life and health insurance premiums, which is higher than in the US, UK, and South Africa. This issue is set to be discussed in the GST Council’s meeting in November. Experts suggest that reducing this tax is essential, as the country has a very low insurance coverage rate.
Aakhir Tak – In Depth
In India, an 18% GST on life and health insurance premiums is notably high. This rate surpasses those in countries like the US, UK, and South Africa. Given this high tax burden, Indian experts are urging the GST Council to reconsider this rate. “Health insurance is a necessity; why make it a luxury?” remarked one user.
Recently, multiple users on social media have highlighted this issue. The rising costs of health insurance deter many from opting for coverage. Currently, India’s insurance penetration rate is only 4%, far below the global average of 7%. The lack of social security and inadequate medical infrastructure exacerbates this problem.
Union Minister Nitin Gadkari expressed his concerns in a letter to the Finance Minister, stating, “Levying GST on life insurance premiums amounts to taxing life’s uncertainties.” Since the implementation of the GST system in 2017, discussions regarding its reduction have continued.
Looking ahead, reducing GST could lead to lower insurance premiums, motivating more individuals to seek insurance. Experts believe this change would enhance competition and ensure better services for consumers.
