Government of India acknowledged concerns regarding the 18% GST on health and life insurance policies. In response, the issue was discussed in the 54th GST Council meeting held on September 9, 2024. The Council decided to form a Group of Ministers (GoM) to review GST on life and health insurance comprehensively. The GoM, led by Bihar Deputy CM Samrat Chaudhary, was tasked with examining potential changes to tax rates. During the 55th GST Council meeting on December 21, 2024, the GoM requested additional time to finalize its recommendations. The Council agreed to extend the timeline, and as of now, no decision has been made regarding a reduction or removal of GST on health or term insurance policies. Any future changes will depend on the GoM’s recommendations and the Council’s approval.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO-228
ANSWERED ON – 04.02.2025
GST ON HEALTH INSURANCE
228. SHRI RAJEEV SHUKLA:
Will the Minister of FINANCE be pleased to state:-
(a) whether the Ministry is aware of the impact of high GST rates on health insurance policies;
(b) if so, whether there is any proposal to abolish or to drastically reduce the 18 per cent GST on health insurance;
(c) if so, the details thereof and if not the reasons therefor;
(d) whether there is any proposal to abolish GST on term insurance; and
(e) if so, the details thereof and if not, the reasons therefor?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a), (b), (c), (d) & (e): GST rates and exemptions on all services and goods are prescribed on the recommendations of the GST Council which is a Constitutional body comprising of members from both the Union and State/UT Governments.
The issue of GST on life and health insurance was placed before the GST Council in its 54th Meeting held on 09th September 2024 at New Delhi. After detailed deliberations, the GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on life insurance and health insurance. Accordingly, a Group of Ministers (GoM) on Life and Health Insurance was constituted under the Convenership of Sh. Samrat Chaudhary, Hon’ble Deputy CM, Bihar.
During the 55th meeting of the GST Council held on 21st December 2024 in Jaisalmer, the Convener of the Group of Ministers (GoM) on Life and Health Insurance sought more time for finalizing the GoM’s recommendations and placing the same before the GST Council. The Council agreed to give more time to GoM to finalize its recommendations.
