GST On Health & Term Insurance: The demand to remove GST on the premium of life insurance and medical insurance is now gaining momentum. On Tuesday, August 6, 2024, opposition parties held a strong protest in the Parliament premises with banners and posters demanding the removal of GST on premium payment of life and health insurance. Leader of Opposition Rahul Gandhi, Sharad Pawar and MPs of opposition parties in both the houses of Parliament participated in this protest.
Rahul said, health and life insurance will have to be made GST free
Attacking the Modi government for levying GST on health and life insurance, Rahul Gandhi wrote on the social media platform X, ‘So that we do not have to bow down to anyone in the ‘health crisis’ of life, the Modi government has collected Rs 24000 crore by imposing GST from crores of common Indians who pay health insurance premium every year by saving every penny. He wrote, looking for a tax opportunity before every disaster is a proof of the insensitive thinking of the BJP government. India Alliance opposes this opportunistic thinking. He wrote, health and life insurance must be exempted from GST.
So that one does not have to bow down to anyone in times of ‘health crisis’ in life, Modi Government collected ₹24 thousand crores from millions of common Indians who pay health insurance premium every year by saving every penny.
Looking for a ‘tax opportunity’ before every disaster is a sign of the BJP government’s insensitive thinking… pic.twitter.com/PWy1chvwBB
—Rahul Gandhi (@RahulGandhi) August 6, 2024
The government collected GST of Rs 24,530 crore
Giving a written reply in the Question Hour in the Lok Sabha on Monday, August 5, 2025, Minister of State for Finance Pankaj Chaudhary told the House that during the last three financial years, the government has recovered Rs 21,256 crore by imposing GST on health insurance premium. Rs 5354.28 crore has been recovered in 2021-22, Rs 7638.33 crore in 2022-23 and Rs 8262.94 crore in 2023-24 by imposing GST on mediclaim policy. Whereas GST of Rs 3274 crore has been recovered on health reinsurance premium. Pankaj Chaudhary said that since the inception of GST from July 1, 2017, 18 percent GST has been levied on health insurance. After this answer of the Minister of State for Finance in the Lok Sabha, the opposition got an opportunity to corner the government.
Nitin Gadkari also demanded
In a written reply to another question, the Minister of State for Finance told the House that demands have been made several times before the government to abolish GST on life insurance and health insurance and reduce rates. Last week, Road Transport Minister Nitin Gadkari wrote a letter to Finance Minister Nirmala Sitharaman demanding removal of GST on payment of premium of life insurance and medical insurance.
The standing committee also recommended
During the tenure of the 17th Lok Sabha, in February 2024 this year, the Parliament Standing Committee of Finance headed by Jayant Sinha recommended the government to rationalize the GST rate on insurance products and especially the premium of health and term insurance. In its recommendations, the committee told the government, due to high rates of GST, the burden of premium increases on policyholders, due to which people shy away from taking insurance policies. The Standing Committee said in the report, many people in the country are just one medical bill away from slipping into poverty, in such a situation, insurance products with affordable premiums and cashless settlement facility will encourage more and more people to take health insurance.
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