The Lok Sabha Unstarred Question No. 3678, to be answered on Monday, August 10, 2026/Shravana 19, 1948 (Saka), on “GST Impact on Livestock Insurance Coverage” was answered by the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary. The Question sought details of GST collected on livestock/cattle insurance policies outside the National Livestock Mission’s subsidised scheme, the basis for applying 18 per cent GST, availability of Input Tax Credit and whether the Government proposes to reduce the tax rate.
The Government informed the Lok Sabha that livestock/cattle insurance falls under Services Accounting Code (SAC) 997139, which also covers other non-life insurance services such as motor vehicle, home and travel insurance. As GST revenue is collected against the SAC as a whole, revenue collected specifically from premiums on livestock/cattle insurance policies outside the National Livestock Mission’s Central Sector Scheme on Cattle Insurance is not separately maintained.
On the applicable tax rate, the Government stated that GST rates and exemptions on supplies of goods and services are prescribed on the recommendations of the GST Council, a constitutional body comprising representatives of the Union, States and Union Territories.
The Government further stated that the GST rate on livestock insurance premiums has been 18 per cent since the introduction of GST on July 1, 2017, which is at par with the rate applicable to most other services.
On the issue of Input Tax Credit, the Government clarified that ITC is admissible only on inputs or input services used for making taxable outward supplies. Where the outward supply is non-taxable or fully exempt, ITC in respect of inputs and input services is not available under the GST law.
The Question had also sought to know whether the Government had examined the differential impact between businesses that may claim Input Tax Credit on insurance premiums for productive assets such as machinery and livestock owners insuring animals as productive assets. In response, the Government reiterated that eligibility for ITC depends on whether the inputs or input services are used for making taxable outward supplies, in accordance with GST law.
On the impact of the 18 per cent GST rate on insurance coverage, the Government said that, as per information received from the Insurance Regulatory and Development Authority of India (IRDAI), no assessment has been undertaken on the impact of the GST rate on insurance uptake among livestock owners outside subsidised schemes.
The Government also informed the House that at present, no proposal to reduce the GST rate on livestock insurance is pending for consideration before the GST Council, including in relation to livestock owners outside subsidised schemes.
The Answer can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/LS-GST-Impact-on-Livestock-Insurance-Coverage-10.08.2026.pdf
