31.01.2024: GST on health insurance must be cut in Budget: Industry experts

Lowering the Goods and Services Tax (GST) rate on health insurance products and incentivizing more and more people to buy them are some of the key expectations of the insurance sector for the upcoming interim budget in 2024.

Industry expert, told ANI that 18 per cent GST rate “does not make the product more affordable.”

“One point I want to make which is you know all the excitement about the economy and rightfully so I think one very important ingredient is a healthy India and for a healthy India, you know, we need a certain level of healthcare spend and we also need to make sure that health insurance, which is the access to health care, penetration increases.”

“So specifically in order to make health insurance more affordable, to incentivize more and more people to buy health insurance, there are two recommendations the industry has had, and I'm articulating them on behalf of the industry. One is a lower GST rate,” He added.

He said that the upcoming budget should focus on lowering the GST rate even to zero percent for senior citizens.

“18 per cent GST does make the product more expensive than it needs to be, especially when healthcare is also tax exempt. So I think that's one ongoing request from the industry that we lower the GST rate on health insurance, maybe even make it zero per cent for senior citizens because that does make the product more affordable,” he added.

He further said that insurance awareness is still building in India.

“The other thing, you know, in our country insurance awareness is still building. So incentives specifically tax intent incentives do encourage people to buy health insurance,” he said.

The Budget session of Parliament, the last session before the general elections expected in April-May, will begin on January 31 and is likely to continue till February 9.

Union Finance Minister Nirmala Sitharaman will present the interim budget on February 1.

The session will begin with President Droupadi Murmu's address to the joint sitting of the two Houses of Parliament.

The interim Budget typically takes care of the fiscal needs of the intervening period till a government is formed after the Lok Sabha polls.

A meeting of the floor leaders of various political parties in both Houses of Parliament will be convened on Tuesday by the Minister of Parliamentary Affairs, Pralhad Joshi.

Source: Business Standard

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