GST rate reduction: How is it going to impact your insurance?
The simple answer which policyholder wants to know is how
much are they likely to benefit if these proposals go through. Rakesh Jain,
CEO, of Reliance General Insurance explains:
Let's assume you pay a premium of Rs 10,000 for your health insurance. At
present, you have to pay an 18% GST on your health insurance premium. So you
pay a GST of Rs 1,800 on each health insurance premium. So, the total health
insurance premium comes to Rs 11,800 (Rs 10,000 + Rs 1,800). Now, if GST is
removed from health insurance premiums, you don't have to pay the additional
GST amount with each premium.
If the GST is reduced from 18% to 12%, you must pay a GST of Rs 1,200 on a
health insurance premium of Rs 10,000. Your total health insurance premium
will be Rs 10,000 + Rs 1,200 = Rs 11,200. So you will save Rs 600 (11,800 - Rs 11,200) on every premium.
If the GST is reduced from 18% to 5%, you must pay a GST of Rs 500 on a health
insurance premium of Rs 10,000. Your total health insurance premium will be Rs
10,000 + Rs 500 = Rs 10,500. So you will be able to save Rs 1,300 (Rs 11,800 -
Rs 10,500) on every health insurance premium.
If the GST is reduced to 0, you will save Rs 1,800 on every health insurance
premium.
Post a Comment