{"id":1296118,"date":"2025-06-09T17:53:09","date_gmt":"2025-06-09T12:23:09","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1296118"},"modified":"2025-06-09T17:53:43","modified_gmt":"2025-06-09T12:23:43","slug":"gst-on-insurance-premium-can-be-removed-critical-gst-council-meeting-will-decide","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/gst-on-insurance-premium-can-be-removed-critical-gst-council-meeting-will-decide\/","title":{"rendered":"GST On Insurance Premium Can Be Removed? Critical GST Council Meeting Will Decide"},"content":{"rendered":"\n<p>In a move that could bring much-needed relief to millions of Indians, the Goods and Services Tax (GST) Council is expected to take up a long-pending proposal to exempt GST on life and health insurance premiums, particularly for term life cover and senior citizen health plans. This decision may come ahead of the monsoon session of Parliament.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"465\" src=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/06\/Untitled-design-4-6.jpg\" alt=\"GST On Insurance Premium Can Be Removed? Critical GST Council Meeting Will Decide\" class=\"wp-image-1296132\" srcset=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/06\/Untitled-design-4-6.jpg 1000w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/06\/Untitled-design-4-6-300x140.jpg 300w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2025\/06\/Untitled-design-4-6-768x357.jpg 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">GoM Pushes for Full GST Exemption<\/h3>\n\n\n\n<p>The Group of Ministers (GoM) on insurance is likely to reiterate its <a href=\"https:\/\/www.moneycontrol.com\/news\/business\/economy\/gst-council-likely-to-take-up-insurance-tax-relief-at-next-meeting-gom-may-stick-to-full-exemption-proposal-13105362.html\/amp\">earlier recommendation<\/a>: a complete GST exemption on term life insurance premiums and health insurance policies for senior citizens. The proposal also includes exempting policies up to \u20b95 lakh\u2014aimed at improving affordability and insurance access for the masses.<\/p>\n\n\n\n<p>Currently, a flat 18% GST is levied on most life and health insurance premiums, significantly inflating the final cost for policyholders.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">IRDAI&#8217;s Inputs Already Submitted<\/h3>\n\n\n\n<p>The Insurance Regulatory and Development Authority of India (IRDAI) has submitted its comments\u2014requested during the last GST Council meeting in December 2024. These inputs are expected to be pivotal in shaping the Council&#8217;s final decision.<\/p>\n\n\n\n<p>Government sources told <em>Moneycontrol<\/em> that while the tax exemptions could lead to an annual revenue loss of \u20b92,600 crore (\u20b9200 crore from term life and \u20b92,400 crore from health insurance), the social benefits could outweigh the financial impact.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Affordability vs. Fiscal Impact<\/h3>\n\n\n\n<p>Reducing GST rates to 12% or 5% has also been discussed, but policymakers believe these measures would either offer insufficient benefit to policyholders or complicate tax input credit mechanisms. A full exemption is now being seen as the most viable solution.<\/p>\n\n\n\n<p>However, the insurance industry has expressed concerns about losing input tax credit (ITC), which allows them to recover GST paid on services like IT, marketing, and admin costs. A complete exemption would block this mechanism, possibly forcing insurers to raise premium rates to compensate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Addressing India&#8217;s Low Insurance Penetration<\/h3>\n\n\n\n<p>India\u2019s insurance penetration remains low\u2014only 3.7% of GDP as of FY24\u2014compared to the global average of 7%. Policymakers believe this GST exemption, particularly for vulnerable groups like senior citizens, could be a targeted intervention to improve coverage.<\/p>\n\n\n\n<p>With the final decision resting with the GST Council, all eyes are on the next meeting, which is likely to take place before the monsoon session of Parliament.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a move that could bring much-needed relief to millions of Indians, the Goods and Services Tax (GST) Council is expected to take up a long-pending proposal to exempt GST on life and health insurance premiums, particularly for term life cover and senior citizen health plans. This decision may come ahead of the monsoon session [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":1296132,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[272,753],"class_list":["post-1296118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-gst","tag-insurance"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>GST On Insurance Premium Can Be Removed? Critical GST Council Meeting Will Decide - Trak.in - Indian Business of Tech, Mobile &amp; Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/gst-on-insurance-premium-can-be-removed-critical-gst-council-meeting-will-decide\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GST On Insurance Premium Can Be Removed? Critical GST Council Meeting Will Decide - Trak.in - Indian Business of Tech, Mobile &amp; Startups\" \/>\n<meta property=\"og:description\" content=\"In a move that could bring much-needed relief to millions of Indians, the Goods and Services Tax (GST) Council is expected to take up a long-pending proposal to exempt GST on life and health insurance premiums, particularly for term life cover and senior citizen health plans. 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