Another big announcement made by central government. On Monday, Finance Minister Nirmala Sitharaman stated that a recommendation from the GST Council to lower the GST rate on health and life insurance policies would likely lead to a decrease in insurance costs for policyholders. The Finance Minister stated in a written response to a query in the Lok Sabha that the GST Council, during its meeting on September 9, proposed the formation of a Group of Ministers (GoM) to examine matters concerning the Goods and Services Tax (GST) on life and health insurance.
Insurance costs may be lower
Sitharaman states, “The issue of revising GST rates on life and health insurance is currently with the GoM.” Should the GST Council suggest a decrease in the GST rate, it is anticipated that the policyholder’s insurance costs will decline as a result of the lowered GST.
Sitharaman suggested
She was questioned whether lowering the GST on health insurance would contribute to making healthcare more fair. When asked about how the government will guarantee that insurance firms will transfer any GST reductions to consumers instead of keeping the benefits by raising premiums, Sitharaman noted that competition in pricing will lower insurance costs.
Advantages may be realized if GST is lowered
She mentioned, “As GST rates are imposed in addition to the insurance premium, a reduction in GST is anticipated to directly benefit policyholders, particularly in a competitive market with numerous insurance firms, since the cost of insurance will decrease accordingly.”
