Anand Roy, CEO and Managing Director of Star Health and Allied Insurance, has voiced support for a reduction in the Goods and Services Tax (GST) on health insurance premiums from 18% to 12%, suggesting it would benefit both the government and consumers.
Roy’s Call for GST Reduction
Speaking at a press meet in Mumbai, Roy expressed that lowering the GST to 12% would be a “win-win” for all stakeholders, particularly consumers, who currently face a significant financial burden due to the high tax rate. “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,” he said, noting that health insurers do not gain directly from the tax since they simply pass it on to the bank.
The current 18% GST on health insurance has long been a point of concern for both policyholders and industry stakeholders, who argue that the tax increases the cost of insurance and limits affordability.
Government’s Consideration
Earlier, reports suggested that the GST fitment committee, composed of state and central government revenue officials, is set to present its recommendations on the matter at a meeting on September 9. The committee is tasked with weighing the potential revenue loss to the exchequer against the financial relief for consumers.
The final decision will be made by the GST Council, chaired by Finance Minister Nirmala Sitharaman, along with state finance ministers.
Bancassurance Growth
Roy also noted that Star Health’s bancassurance business has been expanding rapidly, now constituting about 7% of their total book. The company has partnerships with several large public sector and midsize private sector banks. “Bank insurance right now constitutes around 7 percent of our total book, still a small piece but growing fast,” Roy said.
Future Expansion Plans
Looking ahead, Roy indicated that Star Health is considering venturing into other insurance segments, should the composite licence model come into effect. “We have engaged a consultant to explore this, and if composite licensing happens, we believe we have the potential to excel in multiple lines of business,” he added, clarifying that these are preliminary assessments and not yet final plans.
