NEW DELHI: The Indian government and states generated ₹16,400 crore in GST revenue from life and health insurance services during the 2023-24 fiscal year, reflecting a marginal dip compared to the previous year. Additionally, ₹4,800 crore was collected from education services, such as commercial training and coaching. The figures, disclosed to Parliament on Monday, come as the GST Council prepares to reevaluate tax rates on critical segments.
Breakdown of GST Collections
- Life Insurance:
- Revenue from GST on life insurance services declined by 11%, falling from ₹9,132 crore in 2022-23 to ₹8,135 crore in 2023-24.
- The drop aligns with subdued demand in some segments amid economic uncertainties.
- Health Insurance:
- Conversely, health insurance GST revenue saw an 8% rise, increasing to ₹8,263 crore.
- This growth reflects a growing awareness of health cover importance among Indian consumers.
- Education Services:
- Revenue from commercial training and coaching services contributed ₹4,800 crore.
- Core education services, including schools, transport, books, and journals, remain exempt from GST, aligning with the government’s commitment to affordable education.
Upcoming GST Council Review
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, is set to convene in Jaisalmer next month to consider recommendations made by a group of ministers led by Bihar Deputy Chief Minister Samrat Chaudhary. Key proposals under review include:
- Health Insurance:
Exempting GST on health insurance policies with coverage up to ₹5 lakh, potentially offering relief to middle-income and economically weaker households. - Term Assurance Plans:
Proposals to exempt these from the current 18% GST levy are also on the table, further supporting affordable access to essential insurance products. - Re-insurance:
The Council previously removed GST on re-insurance, which had generated ₹2,000 crore in revenue, signaling a potential move towards more industry-friendly tax policies.
Government’s Stance on Taxation
Minister of State for Finance, Pankaj Chaudhary, highlighted that in the pre-GST era, life and health insurance services were also taxed at standard rates, with exemptions for schemes like Ayushman Bharat and senior citizen-focused initiatives. These exemptions are designed to cater to economically weaker sections of society.
Implications for Businesses and Consumers
- Insurance Sector:
Any tax exemptions could spur growth in the insurance sector, encouraging greater penetration of health and life insurance in a market still underinsured. - Education Services:
GST exemptions for core education services maintain affordability, but continued taxation on coaching and training could affect the burgeoning edtech and private education sectors. - Future Economic Outlook:
Changes in GST policies could recalibrate consumer costs, influencing disposable incomes and overall economic activity in the affected sectors.
Conclusion
As the GST Council deliberates potential rate adjustments, the outcome could significantly impact consumers, businesses, and the broader economy. The focus on affordable access to essential services like health, life insurance, and education reflects evolving fiscal policies aimed at inclusive growth.
For the latest Business and Finance News, subscribe to Globalfinserve, Click here.
#NYSE #USMarkets #Dow #SP500 #NASDAQ #Economy #Finance #Business #Global #Earnings #CEO #CFO #Analysis #AI #Tech