Star Health chief pitches for lower GST levy of 12% on health insurance

Currently the health insurance business attracts a GST of 18 percent. Earlier, Moneycontrol reported that the Fitment Committee is expected to present an answer to this in the meeting on September 9.

It would be a win-win for all stakeholders if the goods and services tax (GST) on health insurance is reduced to 12 percent from 18 percent, believes Star Health and Allied Insurance Chief Executive Officer and Managing Director Anand Roy.

“We have represented 12 percent as a number which we believe can be a win-win for all the stakeholders - the government as well as the consumer - and  we have nothing to gain in this since we just pass it on to the bank,” Roy said at a press meet in Mumbai.

The health insurance business attracts a GST of 18 percent. Earlier, Moneycontrol had reported that the fitment committee is expected to present an answer to this at the meeting on September 9. The committee comprises state and central government revenue officials and is tasked with weighing the potential benefits of relieving consumers of a significant financial burden against the revenue loss to the exchequer and making recommendations to the GST Council. The Council, chaired by Finance Minister Nirmala Sitharaman and consisting of state finance ministers, will take a final call on the matter.

Roy said that the insurer’s bancassurance business has been growing fast and comprises 7 percent of the total book. “Bank insurance right now constitutes around 7 percent of our total book, still a small piece but growing fast. We have a partnership with many large public sector banks and midsize private sector banks.”

He addded that the insurer is expecting to foray to other insurance segments if composite licence comes to reality. “We have engaged a consultant to do this for us and if composite licence happens, being a large company with a large consumer base and also a large distribution setup, we believe that there are multiple lines of business where we can excel,” he said but added that these are initial assessments and not final plans.