GST Waiver On Health Insurance To Cost Bengal Rs 900 Crore Annually: Mamata Banerjee
In a major GST rate rationalisation move, a proposal to exempt health insurance and a bulk of goods from GST is expected to come up when the GST Council meets early next month.
West Bengal Chief Minister Mamata Banerjee on Tuesday said the waiver of Goods and Services Tax on health insurance premiums, if implemented, will hit the state's exchequer by around Rs 900 crore annually.
In a major GST rate rationalisation move, a proposal to exempt health insurance and a bulk of goods from GST is expected to come up when the GST Council meets early next month.
Banerjee said it was West Bengal that first pushed for a GST exemption on health insurance to make medical cover more affordable for the common people.
"The waiver of GST on health insurance premiums will cost Bengal Rs 900 crore. But we had to think of the people first. We have advocated for this reform so that more citizens can access health insurance," she said at a government programme in Bardhaman town.
The current GST on health insurance is 18% and share of state revenue is 9%.
The chief minister, however, cautioned that the benefit should not be diluted by insurers. "We have to ensure that insurance companies do not raise tariffs after the GST cut. The purpose is to reduce the burden on families," she added.
The proposed GST relief is expected to boost penetration in a country where less than one-fifth of the population is covered by private health policies. While the move has been widely welcomed by industry and policyholders, states have flagged potential revenue losses since GST collections on health insurance form part of their tax pool.
Banerjee said her government is trying to expand the Swasthya Sathi scheme, which provides free health coverage of up to Rs 5 lakh to residents of West Bengal. She maintained that the GST waiver, along with state-level initiatives, will further encourage citizens to opt for health insurance.
