Rs 16,400 crore GST mop-up from life, health covers in FY24

NEW DELHI: The Centre and states raked in Rs 16,400 crore from GST on life and health insurance in 2023-24, marginally lower than previous year, and another Rs 4,800 crore from education services, such as commercial training and coaching.

The data disclosed to Parliament on Monday comes at a time when GST Council is reviewing rates on segments such as health covers and term assurance as well as other goods and services. The GST Council is due to meet in Jaisalmer next month to decide on the recommendations of a group of ministers led by Bihar deputy chief minister Samrat Chaudhary.

The panel has suggested doing away with health covers up to Rs 5 lakh, while term assurance plans will also be exempted. Currently both the products face an 18% levy.

In response to a question, junior minister for finance Pankaj Chaudhary told Lok Sabha that GST collection on life insurance dropped 11% from Rs 9,132 crore in 2022-23 to Rs 8,135 crore last year. In the case of health insurance, there was an 8% increase to Rs 8,263 crore, he said. The GST Council had earlier done away with GST on re-insurance, which generated Rs 2,000 crore revenue for govt last year.

"In pre-GST (service tax) period also, health and life services were taxed at the standard rate and similar exemptions were given for specific health and term insurance schemes (such as Ayushman Bharat or senior citizens schemes run by govt) catering to the needs of economically weaker sections of the society," the minister said. Asked about GST on education, Chaudhary said that services offered by educational institutions such as schools and transport were exempted, as were books and journals.