Govt treasury filled with GST on health and life insurance services?
The GST imposed on healthcare and life insurance services has filled the government's treasury. The government treasury has got revenue of more than Rs 16,000 crore from the Goods and services Tax (GST) imposed on these services. Overall, in FY 23-2024, capital of up to Rs 16,398 crore was earned in the form of GST from healthcare and life insurance services. In this, Rs 8,135 crore was collected from life insurance and Rs 8,263 crore from health insurance.
Giving this information in the lok sabha on Monday, minister of State for Finance Pankaj Chaudhary said that in the last financial year, Rs 2,045 crore was also collected as GST from reinsurance on life and health insurance. In this too, Rs 561 crore was earned from reinsurance on life and Rs 1,484 crore on healthcare.
In the last financial year 2022-23, Rs 16,770 crore was earned from GST on these services. During this period, Rs 9,132 crore was collected from life insurance and Rs 7,638 crore from health insurance.
18 percent GST on health insurance
The minister of State for Finance said that at present GST is applicable on health insurance services at the rate of 18 percent. However, no GST charge has been levied on some specific health insurance schemes like Rashtriya Swasthya Bima Yojana (RSBY), Universal health Insurance Scheme, Jan Arogya Bima Policy and Niramaya health Insurance Scheme. These schemes specifically cater to the needs of economically weaker sections and Divyangs.
Role of GST Council and GoM
The GST Council (Council) has asked to constitute a Group of Ministers (GoM) in its 54th meeting on 9 september 2024 to resolve the issue of exemption or reduction in GST on life and health insurance. This GoM was constituted under the chairmanship of bihar Deputy chief minister Samrat Choudhary. The first meeting of this group was held in New delhi on 19 october 2024. These policies were discussed in detail in this meeting. The minister said that after getting the consent of the ministers, it will be placed before the GST Council. At the same time, the next meeting of the council will be held in jaisalmer on 21 december 2024. During this time, the recommendation of exemption in GST can be discussed.