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Gst On Health Insurance

GST on Health Insurance

 

  • Tax Savings up to 75000* u/s 80D
  • Get No Claim Bonus upto 150% for every claim free year
24800+
Cashless Healthcare Providers^^
48 LAKH+
Insurance Claims Settled**
24*7
Claim and Customer Support
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Get ₹ 5 Lac Health Cover at ₹ 358/month^ Discount Sticker

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The introduction of the Goods and Services Tax (GST) in the year 2017 was a remarkable decision by the Government of India. It has removed the cascading effects of multiple taxes that existed earlier. GST is levied across the country on several goods and services, including health insurance.

The GST on health insurance is charged at a rate of 18%. Earlier, the rate of service tax on insurance was 15%, which included a Basic Service Tax of 14%, Swachh Bharat Cess of 0.5% and Krishi Kalyan Cess of 0.5%.

Before we know the impact of GST on insurance premium and potential policy buyers, let us understand about GST.

What is GST?

GST is a single indirect tax applied at the point of consumption of various goods such as household items, food, textile, electronic products, etc. and services like transportation, real estate, insurance, etc. There are four types of GST such as:

  • Central GST (CGST): A part of the GST payable per transaction goes to the Central Government
  • State GST (SGST): The part that goes to the state Government, when a transaction takes place within a particular state.
  • Integrated GST (IGST): The GST levied on inter-state supplies where transactions take place between two states or union territories (UTs), one state or UT, and a foreign territory.
  • Union Territory GST (UGST): The GST levied by a Union Territory in India for transactions occuring within the Union Territory.

GST is applied on various goods and services under five slabs: 0%, 5%, 12%, 18%, and 28%. Medical insurance products are charged at a rate of 18%. But do you know why 18% GST on health insurance is levied?

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Get ₹ 5 Lac Health Cover at ₹ 358/month^

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Individual Health Insurance

A Safety Net that Protects You Against Medical Emergencies

  • Plan starting from 25 lakhs and going up to 6 Crores
  • An add-on offering unlimited e-consultations
Preffered
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Pre-Existing Diseases Cover

Health Insurance for Diabetes, High BMI and Hypertension

  • Dialysis Cover 
  • Day Care Treatments
Preffered
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Health Insurance for Senior Citizens

Your Parents have always care for you, Now its your TURN

  • No Pre-policy medical check-up
  • Annual Health check-up for all insured persons

Impact of GST on Health Insurance

All insurance schemes, including best health insurance come under the ambit of the Goods and Services Tax (GST). This means the premium you pay towards your medical insurance policy would attract an 18% GST, as specified above.

After the implementation of GST on medical insurance premium, there has been a hike in insurance cost for buyers. From the earlier 15% service tax, they will now have to pay an additional amount based on the current rate.

The premium you pay towards your health plan offers you comprehensive coverage for various medical expenses, which is not just limited to hospitalisation but goes beyond that. That is, expenses incurred during the policy period for pre-and-post hospitalisation, daycare treatments, diagnostic tests, OPD costs as well as maternity care are also covered in such plans.

Health Insurance GST Rate

The GST on health insurance products is applicable to the entire premium amount. This is not so in the case of life insurance, where GST for health insurance is applicable only on the risk coverage component of the premium and not on the investment component, which provides maturity benefits.

Example: Let us suppose you opted for a health insurance policy of coverage amount of Rs 5 Lakh, and the premium cost is Rs 11,000 per year.

Now, let us see the cost impact:

Before GST:

The tax applicable was 15%. That is, the premium to be paid would have been:

(15% GST on 11,000) + 11,000 = 12,650

After GST:

The current tax applicable is 18%. That is, the premium to be paid is calculated as below:

(18% GST on 11,000) + 11,000 = 12,980

As a buyer, you will have to spend Rs 12,980 on your medical insurance premium.

Why do you need a Health Insurance Plan?

Events and ailments cannot be predicted. They can happen to anyone, at any time. With modern lifestyle moving towards rising workload, irregular food habits and variable sleep patterns, your body deserves a significant amount of attention to work in a balanced manner.

Calculate Health Insurance

Health Insurance is a shield that protects you and your loved ones in medical emergencies.

Calculate Health Insurance

A right health insurance plan ensures that a financial crisis is not an issue during a medical emergency.

Calculate Health Insurance

With the skyrocketing cost of healthcare in the country, opting for a good health Insurance Plan is a smart decision for the safety of the individual and family.

How Care Health Insurance Plans Can Help You?

22900+

Vast & growing hospital network for cashless claims#

38 Lacs +

Claim Settled**

100%

In-house settlement for better management

95.2%

Industry best claim settlement ratio*

37

Less grievance ratio per 10,000 claims

GST Impact on Renewal of Medical Insurance

After the implementation of the GST, new policy buyers and those renewing their policy are required to pay a higher premium amount. However, those who have purchased policies earlier with a longer-term period would not be impacted by GST. Yet, when they renew their plans, the premium paid by them will be based on present tax rates.

Positive Impact of GST on Health Insurance

As explained above, there has been a clear hike in the premium prices for health insurance buyers. Nevertheless, there are some advantages they can look forward to.

Owing to the competition in the market, health plans are now available for many affordable prices. This is a major benefit since healthcare costs are mounting steadily and high premium can further increase the financial burden for people. Now, that will not happen. Health insurance policies with affordable premium become highly rewarding.

In addition to this benefit, buyers are also experiencing convenience in terms of seamless processes for buying health policy and hassle-free claim settlement.

Click to know about Claim Settlement Ratio

Negative Impact of GST on Health Insurance

With the implementation of GST, all health insurance buyers are bound to pay additional charges based on the applicable tax rates. Moreover, individuals who have bought health policies cannot avail input tax credit. Also, corporate policyholders having group policies for their employees cannot avail input tax credit.

Conclusion

Health insurance in today’s times holds great significance as far as a family's financial protection is concerned. It is essential to realise that by paying the premium, with additional GST charges, you are getting a health cover which is extensive in nature and which covers the medical expenditure you are likely to incur.

Get affordable health plans from Care Health Insurance that meet your and your family's specific health needs.

*IBAI Claims Handbook for FY 19-20

Voice Of Customer

Rahul Sangwan

My appreciation for your prompt service

Recently, I’ve purchased JOY Maternity insurance for my expecting wife and my experience was excellent with the claim settlement team who helped me deal with all the formalities smoothly. Thank you for making my decision the right one!

Rahul Sangwan

Health Insurance

Samanway Barik

We will continue to avail of your scheme

I ported my healthcare plan last year; it is the wisest decision I made by choosing Care Health Insurance. I recently got admitted due to a viral infection, and all my expenses got covered under my plan.

Samanway Barik

Health Insurance

Soubhagya K Kulkarni

Everything went very smooth

Thank you for helping me when I needed help the most, being in the hospital. Buying Care’s health insurance plan is my best decision so far.

Soubhagya K Kulkarni

Health Insurance

Vaibhav Rai

Really helpful explaining the process in advance

Thank you for helping me with your fastest claim settlement process. I didn’t have to wait much for the approval. Everything was quick and seamless.

Vaibhav Rai

Health Insurance

Zeroing in on a health insurance plan for your family is a tricky choice, given the number of insurers in the market who offer similar policies. It is not wise to simply choose the policy with the lowest amount of premium. You need to compare different policies, their features and benefits. Care Health Insurance (CHI) is a specialist Health Insurer and offers products keeping in mind the needs of a customer in the event of a medical exigency. CHI offers a distinct set of benefits giving a clear choice for providing you with the best possible health insurance.

Awarded

Awarded as Best
Health Insurance Company of the year^

claims-paid

48 LAKH+ Claims Settled*

cashless-claim

24800+
CASHLESS HEALTHCARE PROVIDERS^^

^India Insurance Summit & Awards 2023

FAQS on GST

Q. How will GST work?

GST is a single indirect tax levied on different household items, food, textile, home appliances, services, transportation, etc. It has five slabs 0%, 5%, 12%, 18%, and 28%. At present, GST on health insurance is18%.

Q. What is the applicable GST rate on premium for a family health insurance?

The GST rate for a family health insurance in India is generally 18%. This implies that when you make a premium payment, 18% of that amount is the GST component.

Q. How will it affect Goods and Services?

It has its pros and cons for goods and services. On one side, it removes the interstate movement of goods increase the supply and decreases the prices. On the other hand, it also increases the costs of the goods and services buyers ultimately have to bear.

Q. How is GST on health insurance benefits for buyers?

After the implementation of GST on medical insurance, its premium has been increased. Earlier, it was 15%, but now it is 18%. It means you have to pay a higher premium. However, it is worth it in terms of the benefits and privileges you get from health insurance.

Q. What is the GST on health insurance premiums?

Earlier, GST on health insurance was 15%, but now it has increased to 18% on premium.

Q. Is GST payable on the premium of all my health insurance policies?

Health insurance policies come under services. So, yes, 18% GST on all medical insurance policies is payable, included in the premium.

Q. Can I claim GST on health insurance? Is GST refundable?

GST is refundable only when a person sells goods at lower tax rates and pays a higher tax rate. However, an individual paying GST on health insurance is not refundable.

Q. Will I have a view on the GST component I am paying in my health insurance premium?

Yes, you can view the GST component you are paying for health insurance premium.

Q. Will GST be applicable in Jammu and Kashmir?

Yes, the health insurance GST rate is applicable in Jammu and Kashmir.

Q. Can we claim GST input on health insurance?

An organization is not permitted to claim the GST paid on health insurance as an input tax credit or ITC under Section 17(5)(b) of the CGST Act.

#Annual premium for product 'Care' and 'Care Shield (add on)' is Rs. 4286/-(excl. GST) for 1 adult falling under the age bracket 05-24 years.

^^Number of Cashless Healthcare Providers till 31st March 2024

^10% discount is applicable for a 3-year policy

**Number of Claims Settled as of 31st March 2024

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