Finance Minister Nirmala Sitharaman Responds to Opposition on GST for Health Insurance
New Delhi, August 7: Finance Minister Nirmala Sitharaman addressed the suggestions from Opposition members to reduce GST on health insurance premiums. She clarified that taxes on such items existed even before the GST regime started in 2017. She advised members to discuss the issue with their state’s finance minister, who can then bring it up in the GST Council, where states hold two-thirds of the representation.
Both life and medical insurance premiums currently have an 18% GST rate. During the discussion on the Finance Bill 2024-15, which was passed, Sitharaman emphasized that the tax on medical insurance is not new and existed as a Service Tax before GST. She questioned whether those protesting had raised the issue with their state finance ministers.
Recently, leaders from Opposition-ruled states, including West Bengal Chief Minister Mamata Banerjee, requested a reduction in GST on insurance premiums, calling the tax ‘anti-people.’ Union Minister Nitin Gadkari also wrote to Sitharaman seeking a reduction. Sitharaman explained that the matter had been discussed in multiple GST Council meetings and refuted a newspaper report claiming the central government pocketed Rs 24,529 crores from health insurance premiums.
She clarified that 9% of the 18% GST on health insurance premiums goes to the state, and another 41% of the central government’s portion also goes to the states, totaling approximately 73-74% of the GST collected on health insurance premiums going to the states. She urged members to write to their state’s finance minister to bring up the issue in the GST Council.
The INDIA alliance leaders protested outside Parliament, demanding a rollback of GST on health and life insurance products, with Congress leader Rahul Gandhi joining the protest.
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is in charge of managing the country’s money and finances. In India, this person is Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is an important leader in India who takes care of the country’s money matters. She is the Finance Minister.
Opposition -: The Opposition is a group of people in the government who do not agree with the main ruling party. They suggest different ideas and solutions.
GST -: GST stands for Goods and Services Tax. It is a tax that people pay when they buy things or use services. It helps the government get money to run the country.
Health Insurance -: Health insurance is a service that helps people pay for their medical bills when they get sick or need to go to the hospital.
Premiums -: Premiums are the money people pay regularly to keep their health insurance active. It is like a subscription fee.
State Finance Ministers -: State Finance Ministers are people in charge of money matters in each state of India. They help manage the state’s finances.
GST Council -: The GST Council is a group of people from the central and state governments who decide how GST should be applied and managed in India.
Mamata Banerjee -: Mamata Banerjee is a political leader in India. She is the Chief Minister of West Bengal, a state in India.
Nitin Gadkari -: Nitin Gadkari is a political leader in India. He is a minister in the central government and takes care of road transport and highways.
Rahul Gandhi -: Rahul Gandhi is a political leader in India. He is a member of the Opposition and belongs to the Congress party.
Parliament -: Parliament is a place where important leaders meet to make laws and discuss issues for the country. It is like a big meeting hall for the government.
