GST Collection on Health and Life Insurance

The Union Government collected ₹16,398 crore as GST from health and life insurance services in FY24, reflecting a significant 680% increase from ₹2,101 crore in FY20. However, this marked a slight drop compared to ₹16,770 crore in FY23. Life insurance contributed ₹8,135 crore, while health insurance added ₹8,263 crore in FY24. Additionally, ₹2,045 crore was raised from reinsurance services, with ₹561 crore from life reinsurance and ₹1,484 crore from health reinsurance. Specific schemes like Rashtriya Swasthya Bima Yojana (RSBY) and Jan Arogya Bima Policy remain exempt from GST.

GST on Insurance: Historical Context and Current Rate

GST on health and life insurance is currently levied at 18%, similar to the pre-GST era where standard rates applied under service tax. Exemptions have consistently been provided for targeted schemes supporting economically weaker sections and the differently abled.

Formation of GoM and Pending Recommendations

The GST Council, in its 54th meeting on September 9, 2024, deliberated on the demand to reduce GST on insurance premiums and formed a Group of Ministers (GoM), led by Bihar’s Deputy CM Samrat Choudhary. The GoM held its first meeting on October 19, 2024, and is expected to present its recommendations during the GST Council’s December 21, 2024, meeting in Jaisalmer.

GST Collection on Education Services

The government also reported a 67% increase in GST collected from non-exempted education services, such as commercial training, amounting to ₹4,792.40 crore in FY24 from ₹2,859.49 crore in FY22. However, printed materials like books and newspapers remain exempt.

Summery of the news