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COVID-19 medicines and instruments are being sold at a GST rate of five per cent while other medicines are sold at a GST rate between five and 12 per cent ever since the pandemic started, Union Minister of State for Finance Pankaj Chaudhary said in the Lok Sabha on Monday.
Chaudhary also said that 66 per cent of government-sponsored health insurance schemes in the country are being run by the central government.
When the COVID-19 pandemic started, a decision was made for sale of all medicines at the GST rate between 5 and 12 per cent and the GST rate for COVID-19 related medicines and instruments has been reduced to five per cent, he said during the Question Hour.
The minister said the GST rate for health insurance is 18 percent, which is as per international standards, and similar to what it was during pre-GST days in the country.
He said senior citizens can avail tax rebate of up to Rs 1 lakh on health insurance policies.
Chaudhary said GST rates and exemptions on all services (including GST on health insurance premium) are prescribed on recommendations of the GST Council which is a constitutional body comprising Union Finance Minister and ministers as nominated by respective state and union territory governments.
At present, Goods and Services Tax (GST) on health insurance services is levied at standard rate, i.e., 18 per cent. Specific health insurance schemes catering to the needs of economically weaker sections of the society and differently abled, such as Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Argoya Bima Policy and Niramaya Health Insurance Scheme are fully exempt from GST, he said.
Further, he said, healthcare services are also exempt from the GST.
Representations to reduce the GST on health insurance were placed before the GST Council in its 31st meeting held on December 22, 2018 and in its 37th meeting held on September 20, 2019.
The GST Council did not make recommendation for reduction of GST, he said.
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