No Recommendation Under Consideration To Reduce 18% GST On Health Insurance Premium: MoS Finance

The proposal for setting up a special purpose vehicle for monetisation of non-core assets (surplus land and property) is under consideration of the government.

New Delhi: There is no recommendation under consideration of the GST Council to reduce Goods and Services Tax (GST) on health insurance premium, Minister of State for Finance Bhagwat K Karad stated on Monday.

Bhagwat Karad responded, in a written reply to the Lok Sabha, that the GST levied on health insurance premium is 18 per cent.

“The rate of GST is decided on the recommendations of the GST Council, which is a constitutional body comprising members from the central government and state governments. At present, no recommendation to reduce the GST rate on health insurance premium is under consideration of the GST Council,” he informed, as quoted by news agency PTI.

In response to another question, the Minister of State for Finance stated that the expansion of health insurance on commercial basis lies in the domain of insurers, which draw up their business and growth strategies with the approval of their respective boards, and economies of scale from such expansion help bring in cost efficiencies.

Strengthening of regulatory mechanisms for policyholder protection is a function vested by the Insurance Regulatory and Development Authority Act, 1999 in the insurance regulator, which reviews regulations on an ongoing basis in light of the experience of their working and the needs of insurance industry, he mentioned.

He further said that “while public health is a state subject and accordingly the state governments primarily draw up public health interventions from time to time, the central government has launched Ayushman Bharat — Pradhan Mantri Jan Arogya Yojana as a centrally sponsored scheme for an annual family health cover of Rs 5 lakh for 10.74 crore families (approximately 50 crore beneficiaries), thereby massively expanding health insurance coverage”.

In another response, Bhagwat Karad talked about the Financial Stability Report (FSR) released by Reserve Bank of India (RBI) in July 2021 wherein macro-stress tests indicate that the gross non-performing asset (GNPA) ratio of Scheduled Commercial Banks (SCBs), under the baseline scenario, may increase from 7.48 per cent in March 2021 to 9.80 per cent by March 2022.

“As per RBI inputs, the said GNPA ratio has been arrived at without factoring in the impact of the policy actions under way. Therefore, the actual movement of GNPAs of SCBs will depend on the extent to which the benefit of such policy interventions from the Central Government and RBI is availed of by the eligible borrowers which, in turn, facilitates revival of accounts under stress,” he said, as quoted by PTI.

It was also informed that in pursuance of announcement in Budget Speech for financial year 2021-22, the proposal for setting up a special purpose vehicle for monetisation of non-core assets (surplus land and property) is under consideration of the government.

(With Agency Inputs)