GST relief on health insurance may lead to Rs 3,500 crore revenue loss, says govt official
A proposal to exempt health insurance policies from the 18 percent goods and services tax (GST) could deal a Rs 3,500 crore blow to government revenues annually, according to a senior official who is part of the Fitment Committee considering the plan ahead of the GST Council’s September 9 meeting.
“If we exempt full health insurance, the loss will be almost Rs 3,500 crore. Exemption of health insurance from GST, if approved by the Council in the meeting on September 9, will cause a huge revenue loss,” the official said, requesting anonymity.
The Fitment Committee, comprising state and central government revenue officials, is tasked with weighing the potential benefits of relieving consumers of a significant financial burden against the revenue loss to the exchequer and making recommendations to the council. The council — chaired by Finance Minister Nirmala Sitharaman and comprising state finance ministers — will take a final call on the matter.
