Medical insurance was taxed by respective states even prior to GST regime: FM Sitharaman

Medical insurance was taxed even prior to the GST regime by states, finance minister Nirmala Sitharaman said on Wednesday in her reply to the discussion on amendments to the Finance Bill.

Tearing into the opposition on demand for amending GST on life and health insurance, the finance minister said that none of members making these calls have written to their respective FMs to reduce GST on medical and life insurance, when the ball was in their court.

The finance minister noted that Rs 12,264 crore of the amount collected from GST on the life and medical insurance went to the states.

“73-74 percent of the amount collected under the GST goes to the states,” the FM noted.

The government in a reply to Parliament had noted that around Rs 24,000 crore was collected from GST on health and life insurance in the last three financial years.

Union minister of roads, transport and highways Nitin Gadkari had written to the government demanding a removal of GST on life and medical insurance, which has been levied since 2017.

The finance minister highlighted that states had two-thirds share in GST Council and they were capable of taking a decision.

The FM noted that the issue had come up during the 31st, 37th and 42nd meeting of the GST Council.

“Several suggestions have come up and I shall take up with the GST council,” the FM said.

The FM also targetted states on not doing enough on reducing burden on people by reducing the duty on petrol and diesel, which the central government had done.