look news india
States in the country are yet to agree on the proposal to exempt health insurance premium from Goods and Services Tax (GST). In fact, the Fitment Committee is still struggling to reach a consensus on this controversial issue. The Fitment Committee comprises revenue officials of the state and central governments.
A decision in this regard can be taken in the GST Council meeting on September 9. This meeting will be led by Union Finance Minister Nirmala Sitharaman. Two officials who gave information about the developments said that options like exemption for senior citizens, partial exemption or reducing the tax rate to five percent are still being discussed. It is worth noting that the proposal to exempt health insurance premium from GST is being debated. There is also a view that the relief on the income tax front in health insurance premium can be compensated from other areas.
States' revenue may decrease significantly
The concern of the state governments in this case is the significant loss in their revenue which could be Rs. 3200 crore to Rs 4000 crore. According to officials, the exact figure of loss will depend on whether ITC (input tax credit) is retained. Officials said there are several issues with the tax system. Some states estimate that exempting health insurance premium from GST will lead to revenue loss, while others believe that health insurance coverage will increase due to reduction in taxes.