25/10/2025
GST Bechat Mahotsav: A Celebration for Corporates, Not Consumers
When tax relief was promised to the public, but companies walked away with the gains.
By K M Roy
When the Union Government launched the “GST Bechat Mahotsav”, it was projected as a historic move to pass on the benefits of tax rationalization to citizens. From insurance premiums to essential commodities, the campaign’s stated goal was simple — reduce the burden of Goods and Services Tax (GST) and ensure consumers pay less.
Yet, the outcomes on the ground suggest that the so-called “consumer festival” turned into a corporate celebration. Instead of lowering prices, several companies appear to have quietly absorbed the GST benefit by raising their basic prices — effectively defeating the very purpose of the initiative.
A striking example lies in the health insurance sector, particularly in policies offered by United India Insurance Company Limited (UIIC).
In the policy year 2024–25, for a Family Medicare Policy with ₹10 lakh coverage, the base premium was ₹40,336. After adding CGST and SGST at 9% each, the total payable amount came to ₹47,596.
Following the government’s "GST Bechav Mahotsav" and removal of GST on health insurance in 2025–26, one would logically expect the premium to drop by 18%. Instead, the opposite occurred — the base premium nearly doubled to ₹83,586, even though no GST was charged.
Year GST Base Premium Total Paid Change
2024–25 18% GST ₹40,336 ₹47,596 —
2025–26 No GST ₹83,586 ₹83,586 ↑ +97%
This isn’t a small adjustment. It clearly indicates that the insurer absorbed the GST benefit, converting a tax exemption meant for consumers into corporate profit. Despite the government’s policy effort, citizens ended up paying more, not less.
This pricing pattern isn’t unique to insurance. Across industries, similar tactics have quietly neutralized consumer benefit
After GST rationalization, car manufacturers marginally reduced ex-showroom prices but introduced or increased “handling charges,” “logistics fees,” and “compulsory accessories.” The total on-road price remained nearly unchanged.
Electronic Sector Companies adjusted MRPs to reflect lower tax rates but added “installation” and “service” costs, nullifying the impact.
Food & FMCG : Restaurants that briefly reduced menu prices after GST cuts soon raised “service charges,” keeping final bills almost identical.
In essence, the "GST Bechat Mahotsav" turned into a masterclass in price re-engineering, where businesses maintained profits while publicly appearing to comply with government reforms.
The core failure lies not in the government’s intention, but in the absence of effective oversight. There were no clear mechanisms to ensure that tax savings were passed down to consumers.
Without price audits, disclosure norms, or consumer grievance redressal channels, companies could easily claim “cost adjustments,” “revised actuarial assumptions,” or “inflation-linked pricing.” The result: the government’s goodwill became a corporate windfall.
This also highlights a regulatory blind spot. Institutions such as IRDAI (Insurance Regulatory and Development Authority of India), the Competition Commission of India, and the Consumer Protection Authority have remained largely silent on how companies adjusted their pricing post-GST reforms.
This misuse of policy benefits erodes both consumer trust and fiscal credibility. When government reforms fail to reach the intended beneficiaries, public faith in economic governance diminishes.
Moreover, it distorts market fairness. Small businesses, which cannot as easily manipulate pricing, lose competitiveness against large corporations that can shift numbers to protect margins.
Tax relief is meant to stimulate spending and provide relief, not to inflate corporate profit sheets. When that principle is violated, the very spirit of economic reform collapses.
The "GST Bechat Mahotsav" was meant to celebrate consumer relief. But as things stand, it has evolved into a “Corporate Bechat Mahotsav”, where large companies reaped the rewards of policy generosity while consumers continued to shoulder the same costs.
Author’s Note:
The analysis is based on verifiable premium data from United India Insurance’s Family Medicare Policy. The documents show that post-GST removal, the insurer doubled the base premium, effectively absorbing the tax relief intended for consumers.
