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A proposal under consideration by the GST Council would exempt health insurance premiums from the current 18% GST, a move industry leaders say could meaningfully cut costs and expand coverage, especially for seniors and middle-income households. An opinion piece argues that removing GST would signal that health insurance is a necessity, not a luxury, potentially drawing younger buyers into the risk pool and improving long-term market stability. It also flags a trade-off: without GST, insurers lose input-tax credits on tech, distribution and operations, which could tempt some to load costs back into base premiums—undercutting the reform’s benefits unless pricing discipline is maintained. Broader gains could include lower out-of-pocket spending and stronger household resilience, aligning India with global practices where health cover gets tax relief. The article urges swift policy action and transparent industry conduct to ensure consumers receive the full benefit.
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