Hyderabad: State Deputy Chief Minister and Finance Minister, Mallu Bhatti Vikramarka, has urged the Union government to reduce the Goods and Services Tax (GST) on health insurance premiums. He wants the GST rate reduced from the current 18% to 5% for all age groups.
During the 54th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman in New Delhi, Bhatti also proposed that health insurance premiums for senior citizens should be exempt from GST entirely. He emphasized that making health insurance more affordable is crucial for ensuring access to quality health care, especially for middle and lower-middle-class families who face high medical expenses.
Bhatti further explained that it is the responsibility of the government to make health insurance affordable for everyone. He suggested that a Group of Ministers (GoM) should be formed to study the issue and provide recommendations within one month. The recommendations could then be discussed in the next GST Council meeting to make the necessary decisions.
Additionally, the minister said that this GoM should also explore the possibility of reducing or exempting GST on life insurance premiums. He also raised the issue of compensation cess, suggesting that after paying off the loan amount, the cess should be added to the State GST (SGST) to support state finances. Bhatti proposed forming another GoM to look into this matter as well.
Regarding the recovery of excess Integrated Goods and Services Tax (IGST) apportionment made in previous years, Bhatti noted that Telangana had initially received 4.02% of the total apportionment. However, the Centre now proposes to recover 5.07% based on a new formula. To address this, Bhatti recommended forming a Committee of Officers (CoO) to study the issue and develop a formula for recovering the funds from the states. The Council accepted his suggestion and directed the CoO to submit a report within one month.
