The parliamentary panel on finance, chaired by MP Jayant Sinha, has put forth a recommendation to lower the Goods and Services Tax ( GST ) on health insurance products for senior citizens and microinsurance products, aiming to enhance affordability.
In its report on the ‘Performance review and regulation of the insurance sector,’ the committee highlighted the need to rationalise the GST rate on insurance products, particularly health and term insurance, which currently stands at 18%. The panel emphasised that the high GST rate contributes to a significant premium burden, acting as a deterrent to individuals seeking insurance coverage.
Expressing concern over the affordability of insurance, especially for vulnerable groups, the committee proposed a reduction in GST rates applicable to health insurance products, particularly retail policies catering to senior citizens and microinsurance policies. This move aims to make insurance more accessible and affordable for a broader segment of the population, reported Money Control.
The recommendation will enhance the accessibility and inclusivity of the insurance sector. By advocating for GST reduction on health and microinsurance products, the panel seeks to alleviate the financial burden on policyholders while encouraging greater uptake of insurance coverage, particularly among underserved demographics.
The proposal is expected to garner attention from policymakers and industry stakeholders alike, with potential implications for the broader landscape of insurance regulation and affordability in the country. As discussions progress, stakeholders await further developments to ascertain the potential impact of the recommended GST reduction on health and microinsurance products.
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