Lok Sabha Question No. 1190 (UNSTARRED), answered on 2022-07-25
Subject: GST on Health Insurance
Ministry: FINANCE
Asked by: V. Kalanidhi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.1190

## TO BE ANSWERED ON MONDAY, JULY 25 TH  2022/ SRAVANA 3, 1944 (SAKA)

## GST ON HEALTH INSURANCE

## 1190.  DR. KALANIDHI VEERASWAMY:

## Will the Minister of FINANCE be pleased to state:

- (a)  the  details  of  per  cent  of  the  Goods  and  Services  Tax  (GST)  being  charged  on  health insurances within country;
- (b) whether there has been a hike in insurance premium for the buyers after implementation of GST within the country and if so, the details thereof;
- (c) whether these hiked premiums have put an extra burden on common people especially at a time when they are facing huge job losses, unemployment and inflation within the country and if so, the details thereof;
- (d)  whether  a  number  of  health  insurance  schemes  viz.  Rashtriya  Swasthya  Bima  Yojana, Universal Health Insurance Scheme, Jan Arogya Bima Policy and Niramaya Scheme are fully exempted from GST regime;
- (e)  if  so,  the  reasons  as  to  why  other  mediclaims  and  health  insurances  are  not  covered thereunder; and
- (f) whether the health insurance is an essential commodity and needs to be either removed or slotted in the 5 per cent GST slab to make it more affordable to access quality healthcare and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a): At  present,  Goods  and  Services  Tax  (GST)  on  health  insurance  services  is  levied  at standard rate, i.e., 18 per cent. However, certain insurance schemes catering to poor sections of  the  society  and  differently  abled,  such  as  Rashtriya  Swasthya  Bima  Yojana  (RSBY), Universal Health Insurance Scheme, Jan Argoya Bima Policy and Niramaya Health Insurance Scheme are exempt from GST.
- (b) & (c): Health insurance service was standard rated even in pre-GST regime and standard rate has been continued in GST. In addition, there was significant cascading of taxes in preGST regime. Hence, GST has not led to any higher incidence as compared to the taxes in preGST regime.
- (d) & (e): Yes. Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Argoya Bima Policy and Niramaya Health Insurance Scheme are fully exempt from GST. Exemption  has  been  granted  to  specific  health  insurance  schemes  catering  to  the  needs  of economically weaker sections of the society.

(f): GST rates and exemptions on all services (including GST on health insurance premium) are prescribed on the recommendations of GST Council which is a constitutional body comprising members from Union Government and State/UT Governments. Health insurance, like majority of  other  taxable  supplies  is  standard  rated  at  18%  as  stated  above. In pre-GST regime also, health insurance was standard rated. The GST Council in its 31st and 37th meetings examined similar  requests  but  did  not  make  any  recommendation  to  reduce  GST  on  insurance  service from 18% and on health care insurance policies from 18% to 5%. The matter was examined again and placed before the GST Council in its 47th meeting held on 28th and 29th June, 2022, wherein the Council did not recommend any change.

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