Union Finance Minister Nirmala Sitharaman has firmly rejected opposition demands to remove GST from health insurance premiums, calling their protests misplaced and misleading.
In a sharp rebuttal on Wednesday, Sitharaman addressed the controversy surrounding GST on life and medical insurance. She pointed out that a pre-existing tax on medical insurance predates GST, which was introduced to consolidate and streamline taxes.
Referring to a letter from Union Minister Nitin Gadkari, Sitharaman said, ‘The letter was made public by others, prompting a protest by 200 MPs demanding the removal of GST. However, this issue is not new; the tax on medical insurance existed before GST and was present in all states.’
Sitharaman also challenged recent claims that the Centre has amassed ₹24,529 crores from health insurance premiums, calling it ‘incorrect and highly misleading.’ She explained that the 18% GST on health insurance is split equally between Central GST (CGST) and State GST (SGST). ‘Of the ₹24,529 crores collected over the last three years, half went directly to the states as SGST. Additionally, around 41% of the Centre’s share is redistributed to states through tax devolution,’ she added.
The Finance Minister emphasised that the GST Council, a constitutional body, is the appropriate forum for addressing GST-related issues and confirmed that the proposed amendment to remove GST cannot be introduced in Parliament.
Opposition MPs, led by members of the INDIA bloc, staged a protest at the Parliament building on Tuesday, demanding the government withdraw the 18% GST on health and life insurance premiums. They also highlighted Gadkari’s request for the removal of this tax. Following the rejection of an amendment to remove the GST during the Finance Bill’s passage, opposition MPs walked out of the Lok Sabha in protest.
