Policybazaar for Business has spotlighted a critical issue plaguing MSMEs: the steep GST levied on health and life insurance premiums for employees, which acts as a major deterrent to providing essential benefits, particularly for low-wage workers. As the Union Budget 2026 approaches, industry leaders are vocally urging the government to introduce input tax credit provisions or outright exemptions to alleviate this burden. This reform would not only enable better talent retention in a competitive job market but also lower operational costs, boost disposable incomes for employees, and strengthen the overall competitiveness of India’s MSME sector, which forms the backbone of the economy with millions of small businesses driving employment and growth.
MSMEs Demand Input Tax Credit on GST for Employee Insurance in Budget 2026
