look news india
GST on Medical and Life Insurance: On one hand, while there is a demand to remove and reduce the GST applicable on medical and life insurance across the country, the government said in the House that due to the GST applicable in this sector, the government has earned Rs. 21256 crore in the last three financial years. Rs. 8263 crore has been deposited in 2023-24. In response to a question, Minister of State for Finance Pankaj Chaudhary said that from 2022 to 2024, more than Rs. 21 thousand GST has been deposited under medical insurance premium. While under renewal, Rs. 1500 crore was received.
18% GST on medical insurance
After the new system came into effect from July 2017, 18% GST is applicable on medical insurance. There has been a demand for exemption and removal of GST rates on life insurance and medical insurance. Recently, Nitin Gadkari also wrote a letter to the Finance Minister and appealed to cancel the tax on this insurance. The minister said that GST should be removed in some insurance schemes for the poor and the disabled. We are taxing the uncertainties of people's lives. GST has increased the burden of premium on insurance and the policyholder has to pay more.
GST on Financial Services
GST, which came into effect from 1 July 2017, has brought about a major change in India's tax system. GST is an indirect tax. It is applicable on many services like local products, clothing, luxury goods, consumer goods, electronics, transportation, real estate. Both term insurance and medical insurance attract 18% GST.
It is worth noting that before GST, 15% tax was levied on it. But after GST, the burden on the policyholders has increased by 3%.
