Dear All,

As a senior citizen in India, I have firsthand experience of the challenges faced in securing affordable medical insurance. As the Indian population ages, the burden of healthcare costs falls heavily on the elderly, and this issue is further exacerbated by the application of India's Goods and Services Tax (GST) on medical insurance. GST is currently set at 18% for medical insurance, a rate that disproportionately impacts senior citizens who are more likely to require medical attention and who are often living with fixed incomes or no regular income. A report from the International Institute for Population Sciences notes that, in India, out-of-pocket health expenditure constitutes 62.6% of the total health expenditure, with a significant portion directed towards hospitalization charges (World Health Organization, 2021). A reduction of the GST on medical insurance will mitigate these expenses and ensure that senior citizens can access the healthcare they require without undue financial stress. This matters not only for senior citizens but for all of us, as the healthcare and wellbeing of our elderly relatives and loved ones impacts us all. Join us in calling for a reduction in the GST rate on medical insurance for India's senior citizens. Sign the petition today.

Yours Sincerely,

Madhav Mavalankar.

Enclosed My submission.

Request for reduction in GST % on Medical Insurance for Senior Citizens.

Dear All,

This is my humble submission , via “Change.org”

Objective :

To place before the Government / GST authorities,  a strong request; to review and reduce GST on Medical Insurance Premiums , especially Senior Citizens
Facts :

A. Service tax in India was introduced on October 1, 1994, under the Finance Act, 1994. Here's a summary of the changes in the service tax rate from its introduction until the implementation of GST:

Initial Rate: When service tax was introduced in 1994, the rate was 5%.

Rate Increase history:

2000: 8% effective from March 1, 2000.

2003: 10% from April 1, 2003.

2004: 12% from March 1, 2004.

2007: 12.36 Including Cess

2011: 12.46 Including Cess

2015: 15% from June 1, 2015. Including Cess

2017:   18%Transition to GST: From July 1, 2017. 

The progression of the service tax rate reflects adjustments made by the government over time to align with economic needs and policy changes before the transition to GST

“Last year, the government collected Rs 20.18 lakh crores in GST. “The contribution from retail health insurance is minuscule, estimated to be less than 0.4 per cent of the total collection. Reducing GST on health insurance premiums will directly contribute to increased insurance penetration and will be a great service, particularly for senior citizens,” ( Quote From Mr. Bharindwal ).

B. Over last 3 decades insurance premiums have also increased substantially

 

My Submission: 

Past three decades successive governments have kept on increasing the Tax on Medical Insurance premiums. It has now come to an untenable point of 18% , which is very high.
The amount of tax works out to be very high , especially for Senior citizens , as insurance premiums are very high after the age of 60.  Over last 3 decades insurance premiums have also increased substantially
This tax percentage should be reduced to 5 % for senior citizens. Doing so will encourage them to go for adequate insurance cover; especially in the time when they need it the most.
Revenue loss to the government will be minimal , say less than 0.05% of GST collections. 

“GST of 18% is not justified on premiums. Insurance products are bought to safeguard families against financial losses due to early death or illness. Where IRDAI is talking about insurance for all by 2047, the government should reduce the GST to make premiums more affordable,” (Quote from Mr. Arora) 

Signed,

Madhav  Mavalankar

Email : madhav.mavalankar@gmail.com