No daylight robbery, let GST Council decide on tax on medical insurance, says FM Sitharaman

"GST on medical insurance is a matter entirely in the realm of the GST Council. Let the Council take a call on medical insurance now that everyone has been heard on this," FM Sitharaman said.

Reiterating that issue of GST on health and life insurance premiums will be decided by the GST Council alone, Finance Minister Sitharaman told Rajya Sabha on August 8 that the matter should be left to the council now that all stakeholders have been heard of this.

"GST on medical insurance is a matter entirely in the realm of the GST Council. Not justifying this way or that way. Let the GST Council take a call on medical insurance now that everyone has been heard on this," FM Sitharaman said.

The Finance Minister asked protesting members of the House, demanding GST relief, if they have asked their state representatives to push the GST Council to take up this matter.

The Finance Minister said that none of members making these demands have written to their respective FMs to reduce GST on medical and life insurance, when the ball was in their court. The finance minister added that Rs 12,264 crore of the amount collected from GST on the life and medical insurance went to the states last fiscal.

"We may agree or disagree on a rate of taxation on a particular item. GST Council is a constitutional body that has taken a call in their own wisdom. But to call a decision by a constitutional body as daylight robbery is wrong," FM Sitharaman said.

Earlier on August 8, it was reported that the GST rate on the premium paid on health and life insurance may be reduced, and a proposal in this regard has been sent to the GST rate rationalisation committee.

Late last month, Road, transport and highways minister Nitin Gadkari had written to Finance Minister Nirmala Sitharaman, seeking withdrawal of the 18 percent Goods and Services Tax (GST) on life and medical insurance premiums, calling it a tax on the uncertainties of life. Moneycontrol had reviewed the copy of the letter.

The government has informed Parliament that around Rs 24,000 crore has been collected via GST on health and life insurance in the last three financial years.

On August 7, Finance Minister Sitharaman told Lok Sabha that the government has yielded to the voices of the taxpayers and brought the option to choose among new and old long term capital gains (LTCG) tax options on real estate for assets bought before July 23, 2024.