On Thursday, HDFC Life Insurance Company announced that it had been issued GST demand orders totaling more than Rs 27 crore, citing purported discrepancies in tax payments.
Through two separate filings with regulatory authorities, the insurer disclosed receiving demand orders exceeding Rs 16.5 crore and Rs 10.5 crore for alleged GST underpayment and mismatches in input tax credit claims.
These orders also encompass interest and penalties. HDFC Life stated its intent to contest the GST demand orders by appealing to the Appellate Authority.
There is a stipulated GST rate on the premium of an insurance policy. GST rate for health insurance premiums typically falls under the 18% tax slab, it may vary according to the annual Financial budget. The insurer will charge GST on the premium amount.
Read More: GST on Health Insurance: A Burden on Individuals to Pay High Premium
On an unrelated note, the taxes on health insurance are covered under the GST Act. The Parliamentary Panel on Finance has recommended reducing the Goods and Services Tax ( GST ) on health insurance products for senior citizens and microinsurance products below 18 per cent to make it more affordable.
Health insurance is a necessary obligation in the modern world, with or without GST. You must invest in a policy that offers sufficient health insurance coverage. The cost of the premium should not be the only factor when purchasing an insurance plan.
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