The union government’s revenue from Goods and Services Tax (GST) on healthcare and life insurance services surged by an impressive 680% to ₹16,398 crore in 2023-24, up from ₹2,101 crore in 2019-20, according to a written reply by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha.
Despite this remarkable growth, GST collections in this category witnessed a slight dip in FY24, falling marginally from ₹16,770 crore in FY23.
Calls for Reduced GST on Insurance Services
The surge in revenue comes against the backdrop of growing demands from stakeholders, including state governments, to lower GST rates on health and life insurance premiums. Currently, health insurance services are taxed at the standard GST rate of 18%. However, specific schemes designed for economically weaker sections and differently abled individuals—such as Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Arogya Bima Policy, and Niramaya Health Insurance Scheme—are exempt from GST.
GoM to Examine GST on Insurance Services
Bihar Deputy Chief Minister and Finance Minister Samrat Choudhary has been appointed convenor of a Group of Ministers (GoM) tasked with addressing GST-related issues in the health insurance sector. The GoM is set to present its recommendations to the GST Council during its meeting in Jaisalmer on December 21.
Chaudhary informed Parliament that the matter of GST on life and health insurance was deliberated at the GST Council’s 54th meeting on September 9, 2024, in New Delhi. “After detailed discussions, the GST Council recommended the formation of a GoM to holistically review GST issues concerning life and health insurance,” he stated.
Rising GST Revenue from Education Services
In a separate reply, Chaudhary revealed that GST revenue from non-exempt education services—such as commercial training and coaching—has grown by over 67% in the past three years.
In FY24, the government collected ₹4,792.40 crore in GST from such services, compared to ₹2,859.49 crore in FY22. However, many educational materials remain GST-free, including printed books, Braille books, newspapers, journals, periodicals, and children’s picture or coloring books.
These developments highlight the government’s focus on expanding the GST revenue base while addressing stakeholder concerns in key sectors such as insurance and education.
