In the fiscal year 2023-24, the Indian government has collected Rs 8,263 crore as GST on health insurance premiums, as informed by the Minister of State for Finance, Pankaj Chaudhary, in Parliament on Monday.
Key Highlights
GST Collection Breakdown
- Health insurance premium: Rs 8,262.94 crore
- Health reinsurance premium: Rs 1,484.36 crore
Year-on-Year Comparison
- 2022-23: Rs 7,638 crore from health insurance premiums, Rs 963 crore from health reinsurance premiums.
- 2021-22: Rs 5,354 crore from health insurance premiums, Rs 826 crore from health reinsurance premiums.
GST Rate and Exemptions
- An 18% GST rate is levied on health insurance premiums.
- Exemptions are provided for specific schemes catering to underprivileged and differently-abled individuals, including Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Arogya Bima Policy, and Niramaya Health Insurance Scheme.
Industry Representations
- There have been requests for exemption or reduction in GST rates on life and health insurance premiums from industry stakeholders.
GST Council's Role
- Any changes to GST rates or exemptions are decided based on recommendations from the GST Council, a constitutional body comprising representatives from the Centre and States/UTs.
Government's Stance
In response to questions about potential changes to GST rates on insurance services, Chaudhary reiterated that GST rates and exemptions are governed by the GST Council's recommendations. Since the inception of GST on July 1, 2017, life and health insurance services have been subject to GST.
Conclusion
The substantial GST collections from health insurance premiums highlight the growing penetration of health insurance in India. However, the ongoing industry representations for tax relief indicate a pressing need for a balanced approach that addresses both revenue generation and affordability of insurance services for the public.
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