Karnataka urges PM to advise GST Council to abolish 18 % GST on health insurance premiums

The Karnataka government on Friday urged Prime Minister Narendra Modi to advise the GST Council, which is set to meet on September nine, to abolish the 18 per cent tax on health insurance premiums. "Ensuring a healthy India is a duty of every elected representative, beyond party lines. Imposing 18 per cent GST on health insurance is a regressive move, making healthcare less accessible to the common man," the state Health Minister Dinesh Gundu Rao said.

"I have appealed to Prime Minister @narendramodi to take immediate action, advising the GST council to exempt health insurance premiums from GST. It's high time we prioritise the well-being of our citizens," he said in a post on 'X'.
Rao said the GST on health insurance is in one of the highest brackets of taxation at 18 per cent and has been so since 2017 despite several protests from all stakeholders including politicians and policy makers across the board.

"A GST so high on what is an essential service/necessity, especially in a post pandemic world, is draconian to say the least and definitely not what a welfare state should be doing," the Minister said in his letter to the Prime Minister.
A high rate of GST has a direct impact on the cost of premiums which means that health insurance is now more expensive, he said.

The rising cost, while not discernible to the upper economic crisis, has a cataclysmic effect on economic weaker sections to whom even a marginal increase in the premium makes it inaccessible to purchase. "So, in that circumstance, they choose to either forgo another necessity to afford the premiums or, more often than not, avoid getting health insurance at all, which leaves them and their family exposed to a medical emergency which may leave them in severe financial distress, " the letter stated.

"While the rationale for such a high GST has never been explained, as the Health Minister in one of the states which is a pioneer in medical education and infrastructure, I see the positive impact of our cashless state health insurance scheme along with the added protection of purchased health insurance which acts as a buffer in case of larger emergencies. This two-step coverage system is essential to the well-being of our citizenry," Rao said.