PM’s Economic Advisory Council member Sanjeev Sanyal has urged insurance companies to pass the recent GST exemption on health and life insurance premiums to customers. The GST Council removed the 18% tax, lowering it to zero.
Sanyal said companies should focus on innovation rather than complain. “By removing the 18% tax, we have dramatically opened up the market for them. They should now create useful products for consumers,” he said in an interview with Moneycontrol.
Some insurers argued that without GST, they lose input tax credit on operational costs, which could push premiums higher. Sanyal dismissed these concerns as minor and stressed the government expects companies to pass on the benefits. “If you are taxing something less, they should pass it on. What argument is there not to?” he added.
On enforcement, Sanyal noted the government will rely on public pressure rather than creating an “Inspector Raj” to ensure compliance. He also highlighted reforms that have simplified GST registration, reducing harassment for businesses.
Sanyal concluded that beyond minor labeling issues in supply chains, insurers have no excuse for not passing the tax cuts to consumers.
