GST Council did not recommend lowering rate on health insurance: Sitharaman

New Delhi: The Goods and Services Tax Council has not recommended reducing the rate of 18% on health insurance, finance minister Nirmala Sitharaman said in a written reply in Lok Sabha on Monday.

The response was to a question on keeping the GST rate on health insurance as high as luxury products even when costs have gone up during the Covid pandemic.

u201cRepresentations to reduce the GST on health insurance were placed before the GST Council in its 31st meeting held on 22.12.2018 and in its 37th meeting held on 20.09.2019. GST Council did not make recommendation for reduction of GST," she said.

The minister noted that health insurance, like the majority of other taxable supplies, attracts a standard rate of 18%, and the rate was standard in pre-GST regime as well.

She added that the government given significant relief in GST by fully exempting from tax some specific health insurance schemes catering to the needs of economically weaker sections of the society and differently-abled, such as Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Argoya Bima Policy and the Niramaya Health Insurance Scheme. Further, healthcare services are also exempt from GST, the minister said.

According to information provided by the department of health and family welfare, 14.09 crore families with an estimated 70 crore persons have been covered under Ayushman Bharat u2014 Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) which was launched in September 2018 for providing accessible and affordable healthcare to the common man.

Further, another 14 crore persons have been covered under Employeesu2019 State Insurance Scheme and Central Government Health Scheme.

As the worldu2019s largest government-funded healthcare programme, AB-PMJAY targeted more than 50 crore beneficiaries at the time of its launch.

According to NITI Aayogu2019s u201cStrategy for New India @ 75", published in November 2018, envisioned as part of the goal of universal health coverage, coverage of at least 75% of the population with publicly financed health insurance by March 2023.


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