GST on insurance premia fetched Rs.52,000 cr in 5 years
As GST Council prepares to take a call on restructuring rate on various insurance products, government told the Lok Sabha on Monday that GST on insurance premia fetched over Rs.52,000 crore in last 5 years. Centre also said GST collection from unexempted educational services was around Rs.12,000 crore.
It may be noted that going by the formula of distribution and devolution, States are major beneficiary of this rise as they get over 70 per cent of GST collected.
Data mentioned in the written answer by Minister of State in the Finance Ministry Pankaj Chaudhary showed that GST collection was over Rs.29,000 crore, while it was over Ts 23,000 crore through health insurance premia. Around Rs.4,700 crore was collected through re-insurance premia under life and health insurance.
As things stand, the GST rate on premia for health insurance, term and unit-linked insurance plans attracts 18 per cent GST. On endowment plans, the GST is applied differently. While it is 4.5 per cent for premium paid during the first year, it is 2.25 per cent from the second year. For life insurance in the form of single premium annuity policies, the GST rate is 1.8 per cent. Rates are the same for all age groups.
