Revenue from goods and services tax (GST) levied on healthcare and life insurance services fetched over Rs 16,000 crore last fiscal, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha on Monday.
In all, Rs 16,398 crore was collected as GST from healthcare and life insurance services in FY24, including Rs 8,135 crore from life insurance and Rs 8,263 crore from health insurance. Additionally, Rs 2,045 crore was also raised as GST from re-insurance on life and health insurance last fiscal, including Rs 561 crore from reinsurance on life and Rs 1,484 crore on health care.
In contrast, GST on healthcare and life insurance services brought in Rs 16,770 crore in FY23 including Rs 9,132 crore from life insurance and Rs 7,638 crore from healthcare insurance.
“At present, GST on health insurance services is levied at standard rate of 18%,” Chaudhary said in response to a question. Specific health insurance schemes catering to the needs of differently abled and economically weaker sections of the society, such as Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Arogya Bima Policy, Niramaya Health Insurance Scheme are exempt from GST, he further said.
“In pre-GST (service tax) period also, health and life insurance services were taxed at the standard rate and similar exemptions were given for specific health and term life insurance schemes catering to the needs of economically weaker sections of society,” the minister further said.
In response to another question, he said that recommendations of the Group of Ministers (GoM) looking into issues pertaining to GST on life and health insurance will be placed before the GST Council when received.
“The issue of exempting or reducing the GST on life and health insurance was placed before the GST Council in its 54th Meeting held on 9 September 2024 at New Delhi. After detailed deliberations, the GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on life insurance and health insurance,” he said, adding that the GoM on life and health insurance was constituted under the Chairmanship of Samrat Chaudhary, Deputy chief minister of Bihar. The first meeting of the GoM was held on October 19, 2024 at New Delhi where the issues of GST rates on health and life insurance policies were discussed. “The recommendations of the GoM when received will be placed before the GST Council,” he said.
The GST Council is slated to meet on December 21 in Jaisalmer where it is expected to take up the issue of GST on life and health insurance.