Entrepreneur Criticizes GST Structure: Is It Fair?
India’s Goods and Services Tax (GST) regime is under scrutiny following a viral LinkedIn post by an entrepreneur. The post questioned the fairness of GST rates, highlighting disparities between essential and non-essential services. It has sparked widespread public debate, putting the spotlight on India’s tax policies.
Key Issues Raised
GST on Dining vs. Health Insurance
The entrepreneur compared the 5% GST on fine dining with the 18% tax on health insurance premiums.
- He revealed paying ₹25,000 GST on his senior citizen parents’ health insurance, calling it “tax loot.”
- He argued that health insurance, a basic necessity, faces higher taxes than luxury dining, which seems unfair.
GST on Cancer Medicines
The post also pointed out the 12% GST on cancer medicines.
- The entrepreneur mentioned paying an additional ₹24,000 due to the tax.
- He questioned the justification of high taxes on life-saving drugs, particularly for those unable to afford them.
GST on Education
In response to a comment, he criticized the 18% GST on higher education.
- He stated that education should be tax-free as it is a fundamental right.
- He called for policies that make education more affordable for all.
Industry Perspective
Some experts defended the 5% GST on dining, arguing that restaurants cannot claim Input Tax Credit (ITC), unlike manufacturers.
- However, the entrepreneur countered that consumers ultimately bear the tax burden, making ITC benefits irrelevant to them.
Policy and Public Reaction
Ministerial Response
Union Minister Nitin Gadkari recently requested a review of the 18% GST on life and medical insurance premiums. This indicates that discussions about potential GST reforms are ongoing.
Public Debate
The post fueled significant online discussion:
- Many criticized the disparity in tax rates, particularly on essential services like healthcare and education.
- Suggestions included restructuring the tax system to prioritize affordability for basic needs, especially for vulnerable groups.
The Bigger Picture
The GST Council must balance revenue generation with public welfare.
- Proponents of lower taxes on essentials argue that sectors like healthcare and education should not carry high tax burdens.
- Others emphasize the importance of a stable revenue stream to fund government initiatives.
This debate highlights the pressing need to reevaluate GST rates, especially for services critical to public welfare. By addressing these disparities, policymakers can ensure a fairer system that better serves the needs of all citizens.
