Indians may need to get over a tax headache to secure their health
When Indian parliamentarians from opposition parties demanded Finance Minister Nirmala Sitharaman to consider waiving off the Goods and Services Tax imposed on life and health insurance policies, she raised some factors associated with the GST on insurance products.
"I want to raise two important points - tax has been there on medical insurance even before the introduction of GST. There was already a pre-GST tax on medical insurance, before the GST was introduced. This is not a new issue, it was already there in all the states. Those protesting here... did they discuss regarding the removal of this tax in their states?"
The demands for junking indirect tax on health insurance came to limelight as one of her colleagues, Transport Minister Nitin Gadkari, demanded so in a letter. Sitharaman later said the letter wasn’t meant to be public.
Nonetheless, in a country that has high income inequality and healthcare infrastructure needs further major boost, Indians are debating why they should be taxed for something that is associated as a necessity - healthcare. The insurance penetration rate in India is far lower compared to many other nations and tax is an added cost that citizens need to bear if they want to buy medical insurance.
