India exempts individual health insurance premiums from 18% GST

The change lowers costs for policyholders.

From 22 September, individual health insurance premiums in India are exempt from the 18% Goods and Services Tax (GST), under reforms announced by Finance Minister Nirmala Sitharaman, as reported by news agency NDTV.

The change lowers costs for policyholders, with a $169.51( Rs15,000) premium now costing the same instead of $200.02 (Rs17,700). 

It applies to individual plans, family floaters, senior citizen covers, and top-ups, but not to employer group insurance.

Whilst households will save on premiums, insurers lose input tax credits on expenses such as commissions and rent, which could push up base premiums slightly. 

Net savings for customers are expected to be about 3% to 6%.

($1.00 = Rs88.49)