- August 6, 2024
GST on health & life insurance fetched Rs 21,000 crore in 3 years, government tells House – Times of India
NEW DELHI: Amid growing demand for a cut, if not removal, of GST on health and life insurance, government on Monday told Parliament that the levy fetched it Rs 21,256 crore during the last three financial years, with Rs 8,263 being collected during 2023-24.
Responding to a Parliament question, junior minister for finance Pankaj Chaudhary said another Rs 3,274 crore was received as GST from reissuance of health policies during last three years.The GST Council had fixed 18% rate when the new regime kicked in from July 2017. According to the formula, the Centre collects 9% GST with a matching collection by states. From the Centre’s kitty, 41% is shared with the states in line with the devolution formula.
To a question on whether there is a demand from the industry for withdrawal of service tax, Chaudhary said “representations have been received requesting for exemption or reduction in the rate of GST on life insurance and health insurance“. GST rates and exemptions are prescribed on the recommendations of the GST Council, which is a constitutional body comprising representatives from both the Centre and the States/UTs, he added.
The minister said that certain insurance schemes catering to poor sections of the society and differently abled, such as Rashtriya Swasthya Bima Yojana, Universal Health Insurance Scheme, Jan Arogya Bima Policy and Niramaya Health Insurance Scheme are exempt from GST.
Following Nitin Gadkari’s suggestion to do away with GST on health and life products, the demand has gained traction with Bengal netas jumping in to seek the removal of the levy. TMC MP Derek O’Brien sought a reduction in the levy. “The demand is straightforward. Reduce 18% GST on medical and health insurance. We should reduce it because this is an issue which is burdening people, mainly middle class. That is why this needs to be reduced,” he said during Monday’s zero hour.
Responding to a Parliament question, junior minister for finance Pankaj Chaudhary said another Rs 3,274 crore was received as GST from reissuance of health policies during last three years.The GST Council had fixed 18% rate when the new regime kicked in from July 2017. According to the formula, the Centre collects 9% GST with a matching collection by states. From the Centre’s kitty, 41% is shared with the states in line with the devolution formula.
To a question on whether there is a demand from the industry for withdrawal of service tax, Chaudhary said “representations have been received requesting for exemption or reduction in the rate of GST on life insurance and health insurance“. GST rates and exemptions are prescribed on the recommendations of the GST Council, which is a constitutional body comprising representatives from both the Centre and the States/UTs, he added.
The minister said that certain insurance schemes catering to poor sections of the society and differently abled, such as Rashtriya Swasthya Bima Yojana, Universal Health Insurance Scheme, Jan Arogya Bima Policy and Niramaya Health Insurance Scheme are exempt from GST.
Following Nitin Gadkari’s suggestion to do away with GST on health and life products, the demand has gained traction with Bengal netas jumping in to seek the removal of the levy. TMC MP Derek O’Brien sought a reduction in the levy. “The demand is straightforward. Reduce 18% GST on medical and health insurance. We should reduce it because this is an issue which is burdening people, mainly middle class. That is why this needs to be reduced,” he said during Monday’s zero hour.
