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The Confederation of General Insurance Agents Association of India has requested Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and the Government of India to consider exempting individual health insurance policies from the purview of GST.
The association believes that the removal of GST can increase insurance penetration and density substantially and ensure social security to people of India. In FY 2020-21, while the penetration of non-life Insurance was 1 % in FY 2020-21 against global average of 4.1%, its density was at US$ 19 against global average of US$ 449.
The association further requested the ministers and the government to consider reducing GST on individual health insurance policies to 5% from 18%.
In a communication, the association said that while corporates can avail input credit on their GST payment on group health policies, such a benefit is not available to individual policyholders. In addition, many people delay their health insurance purchase due to high premium and GST.
The association has prepared a table which shows many countries with high insurance penetration and density do not charge any tax or charge less tax on individual health insurance policies. Let’s look at it:
