Nothing can be taken for granted today that includesourenvironment, climate, fresh air,drinking water, but ‘taxes’ can be foundin omnipresent state and be deemed applicable to every aspect of the life of tax-paying public,but few can question the wisdom of those who decide the stringent GST rates ! Yet, in quite an extraordinary initiative, reportedly Mr. Nitin Gadkari, the high profile Transport Minister has urged FM Nirmala ji to consider removing GST on life & health insurance, so far a fairly neglected subject forall the political faceoffs and the fiery TV debates !
As a part of the life insurance industry for the past six years (following a long banking career) we’ve seen that the awareness for protecting the lives and wellness of families increased manifold as the pandemic of 2021-22 unleashed devastating effects, the unprepared met dire consequences and timely & adequate insurance cover became a saviour in those deadly times. However, even then, GSTcontinued onlife insurance products including retirement (annuity) plans to senior citizens at rates ranging upto 18%.
Prudence demands that we plan for the uncertain future through various life stages as familial needs, responsibilities grow. From own marriage and building savings to acquire a nice home (and meet the EMIs), children’s schooling and meeting exorbitant higher education costs, adult progeny’s marriage expenses, retirement planning for continual steady income flow to maintain a comfortable living standard. All futuristic goals, bottom-line issomeone (insurer) must take care things go on, if we meet a sudden end. So Gadkari’s cry that ‘levying GST on life insurance premium amounts to levying tax on uncertainties of life’ should force Tax Bosses to introspect !
Coming to health insurance, the second TOI editorial today suggests that the GST rate is too high at 18% and should be slashed down to 5%. Health being a major indicator of society’s well-being, insurance against illness ( specially for senior citizens) becomes a critical element in family budgets but in the pandemic era, the premiums of health insurance products have shot up in recent years and many are forced to opt out of costly insurance. The paper says if health policies being a saleable service, must be taxed the why not bring them under GST’s lowest slab of 5% ? The service quality from various players needs much improvement goes without saying also !
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