Mumbai: Insurers are going to hunt readability from the Centre on the scope of GST exemption for all times and well being covers after the GST Council scrapped the oblique tax on particular person insurance policies however retained the levy on sure adjoining product traces.

Life insurers need readability on credit score life insurance policies, that are technically particular person covers however structured as group contracts by lenders to repay excellent loans in case of a mishap. Insurers say that these insurance policies ought to qualify for exemption however weren’t explicitly talked about within the GST Council’s notification. “What has been talked about outright is that the exemption is for particular person life and well being insurance policies. There is no such thing as a point out of company or group insurance policies, that are taken by a person, and premium paid by a person,” a senior business government stated.

The GST Council moved all particular person life and medical health insurance insurance policies to the nil tax class, efficient September 22. The exemption covers time period, unit-linked and conventional life insurance coverage merchandise, in addition to well being covers resembling household floaters and senior citizen plans.

One other gray space is company well being covers, the place the employer pays the bottom premium, however staff contribute towards top-up plans. Since staff fund the top-up themselves, insurers say these must also be handled as particular person insurance policies and qualify for exemption.

Equally, there may be uncertainty round journey insurance coverage, which presently attracts 18% GST. “From what we perceive, the nil price is relevant solely to life and medical health insurance, not different classes and the business is planning to hunt clarifications,” one other government added.


Beforehand, GST was levied at a number of charges. This included an 18% tax on time period and ULIPs, 4.5% tax on first-year conventional plans and a couple of.25% on renewals.

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