Government collects ₹ 8,263 crore towards GST on health insurance premiums in FY'24

The government has collected ₹8,263 crore towards GST on health insurance premiums in the 2023–24 fiscal year, Parliament was informed on Monday, August 5.

The Minister of State for Finance, Pankaj Chaudhary, said the government has received representations requesting an exemption or reduction in the rate of GST on life insurance and health insurance.

Since its inception, GST at an 18% rate has been levied on premiums paid towards health insurance, the Minister of State said in a written reply in the Lok Sabha.

However, certain insurance schemes catering to poor sections of society and the differently abled, such as the Rashtriya Swasthya Bima Yojana (RSBY), the Universal Health Insurance Scheme, the Jan Arogya Bima Policy, and the Niramaya Health Insurance Scheme, are exempt from Goods and Services Tax (GST).

In 2023–24, the GST collection from health insurance premiums stood at ₹8,262.94 crore, while ₹1,484.36 crore was collected on account of GST on health reinsurance premiums.

In the 2022–23 fiscal, ₹7,638 crore in GST was mopped up from health insurance premiums and another ₹963 crore from health reinsurance premiums.

In the 2021–22 financial year, GST of ₹5,354 crore was mobilised from health insurance premiums, while ₹826 crore came in from health reinsurance premiums.

In reply to a separate question, Chaudhary said after the introduction of GST with effect from July 1, 2017, GST is leviable on life insurance and health insurance services.

To a question on whether there is a demand from the industry for the withdrawal of service tax, Chaudhary said, "Representations have been received requesting an 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, the minister added.