New GST Reforms Aim to Make Health Insurance and Life-Saving Drugs More Affordable
Recent Goods and Services Tax (GST) reforms in India represent a significant shift toward achieving universal health coverage. The most notable change is the complete removal of GST on individual health and life insurance premiums, which previously stood at 18%. Additionally, the GST Council has lowered taxes on most medicines to 5% and reduced the tax on life-saving drugs to zero. Medical devices and diagnostic kits have also seen tax cuts to a uniform 5% slab. These measures are expected to lower procurement costs for hospitals and out-of-pocket expenses for patients, simplifying the overall healthcare supply chain.
Key Points
- GST on individual life and health insurance premiums has been reduced from 18% to 0%.
- Taxes on essential medicines and life-saving drugs have been slashed to 5% and 0% respectively.
- Diagnostic equipment and medical devices are now taxed at a lower uniform rate of 5%.
- The reforms aim to simplify compliance and improve the affordability of healthcare for households.
Exam Facts
- Previous GST on insurance: 18%.
- New GST on life-saving drugs: 0%.
- Target: Closing the gap between India's 3.7% GDP health insurance coverage and the 6.8% global average.
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