The Union Minister of State for Finance Pankaj Chaudhary replied to questions on GST on COVID-19 medicines & health insurance premiums during Lok Sabha’s question hour. Excerpts from his answers are as below:
- COVID-19 medicines and instruments have been sold at 5% Goods & Services Tax (GST), and other medicines have been sold at a range of 5%-12% GST ever since the pandemic started.
- The decisions on GST rate rationalisation and exemptions on all services, including health insurance premiums, will be taken on Council’s recommendations.
- The GST Council is a constitutional body comprising Union Finance Ministers and ministers representing state/Union Territory governments.
- Presently, health insurance services attract 18% GST. However, specific health insurance schemes designed for the needs of economically weaker sections of the society and differently-abled, such as the Universal Health Insurance Scheme, Rashtriya Swasthya Bima Yojana (RSBY), Niramaya Health Insurance Scheme and Jan Argoya Bima Policy, are fully exempt from GST.
- The Council received representations to reduce the GST on health insurance in its 31st meeting held on 22nd December 2018 and 37th meeting held on 20th September 2019.
- However, the Council did not recommend the rate reduction as the 18% GST rate on health insurance is as per international standards and similar to pre-GST tax rates.
- The Central Government manages 66% of government-sponsored health insurance schemes in India.
- Senior citizens can avail of a tax rebate of up to Rs 1 lakh on health insurance policies.
- Most healthcare services are exempt from the GST, with few exceptions.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.