The recommendations of the Group of Ministers (GoM), tasked with examining GST issues related to life and health insurance, will be reviewed by the GST Council once submitted, Parliament was informed on Monday.
The matter of reducing or exempting GST on these insurance categories was deliberated during the Council's 54th meeting on September 9, 2024. Following detailed discussions, the Council resolved to form a GoM to comprehensively address the issue. The GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, held its first meeting on October 19, 2024, in New Delhi to evaluate the GST rate structure for health and life insurance policies.
Minister of State for Finance, Pankaj Chaudhary, confirmed in a written Lok Sabha reply that the GoM's recommendations would be presented to the GST Council. Currently, GST on health and pure term life insurance services is charged at the standard rate of 18%.
Revenue from GST on Insurance
In fiscal 2023-24, revenue generated from GST on healthcare and life insurance services amounted to ₹8,263 crore and ₹8,135 crore, respectively. This was a slight increase for health insurance but a decline for life insurance compared to the previous year’s collections of ₹7,638 crore and ₹9,132 crore.
The GST Council, a constitutional body comprising Union and State/UT representatives, prescribes tax rates and exemptions for services, including insurance.
India's Forex Reserves and Gold Holdings
Separately, Chaudhary informed the Lok Sabha about India’s forex reserves and gold holdings. As of September 2024, the Reserve Bank of India held 854.73 metric tonnes of gold, with 510.46 metric tonnes stored domestically. The total value of the gold holdings stood at $65.75 billion.
India ranks fourth globally in forex reserves, following China, Japan, and Switzerland, as per the International Monetary Fund's data.
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