Finance Minister Nirmala Sitharaman
Around Rs 24,529 crore was collected from GST on health and life insurance in the last three financial years.73-74 per cent of the amount collected under the GST goes to the states,” Nirmala Sitharaman, union finance said in the Lok Sabha during her reply to the amendments of Finance Bill, 2024
NEW DELHI: Finance Minister Nirmala Sitharaman on Wednesday asked the opposition to convince their states to propose removal of 18 per cent GST levied on life and health insurance premiums at the GST Council.
“Several suggestions have come up and I shall take up with the GST Council,” Sitharaman said during her reply to the amendments of Finance Bill, 2024 in the Lok Sabha.
Those who are demanding removal of 18 per cent GST on premiums on life and medical insurance should first convince their finance ministers of respective states on this matter, she said.
Tax was being levied on medical insurance premiums prior to the GST rollout, she said, adding this tax was subsumed into GST.
Finance ministers of Congress, TMC, AAP and left-ruled states should come up with proposals at the GST Council rather than protesting outside Parliament, she said.
“Have you consulted your states for removal…have you written to your state Finance Ministers but here you are protesting against GST…what is this drama”, she quipped.
The finance minister highlighted that states had two-thirds share in GST Council and they were capable of taking a decision.
The issue came up in three GST Council meetings — 31st , 37th and 47th meeting.
About 73-74 per cent of GST collected under the head goes to states and they should have the heart to forgo this, she said.
Out of the total GST collections of Rs 24,529 crore from Health Insurance in the last three years, she said, half of it, Rs. 12,264 crores, went straight to the states as SGST. It doesn’t even come to the Centre.
Apart from this, roughly 41 per cent of the Centre’s share of GST collection on Health Insurance is devolved back to the states again as part of Tax Devolution as per the Finance Commission’s formula, she said.
“The issue of removal of 18 per cent GST can be decided by the GST Council. Bringing an amendment here will not serve any purpose. First the GST council will decide, then only an amendment can be brought here,” she said.
Commenting on the walkout staged by the opposition on the issue of the Speaker not considering an amendment moved by N K Premachandran (RSP) on the removal of GST, she said Parliament is not the right forum for this.
“The opposition tried to get a GST amendment through the Finance Bill. How can Parliament consider any subject which has not been approved by the GST Council,” she said.
Premachandran, a senior member, was not rightly informed about the issue of GST that is why the Speaker did not take up the amendment moved by him, she said.
“Everything was going on smoothly, but MP NK Premachandran alleged that his request for an amendment was not considered by the Speaker. He wanted an amendment in GST via the Finance Bill. I think the MP was not rightly informed. The Speaker did not consider it because it can only be considered by the GST council,” she said.
Expressing regret about the walkout during the discussion and passage of the Finance Bill, she said, it was disappointing that the opposition did not contribute to the passage of the Finance Bill.
Amit Malviya, in-charge of the Bharatiya Janata Party’s information and technology department, says, “Of the total collection of Rs 24,529 crore from health insurance (18%), half of it, i.e. Rs 12,264 crore, goes straight to the states (SGST 9%). It doesn’t even come to the Centre. Of the Centre’s share of collection, roughly 41% is devolved back to the States again as part of Tax Devolution as per Finance Commission’s formula!”
On the demand to remove the 18% GST, he tweeted: “On cutting GST Rates, Govt of India alone can’t cut the GST rates on health insurance. That decision lies with the GST Council, where states hold 2/3rd power to bring changes.”