What is the story about?
The GST Council recently announced the exemption of individual life and health insurance premiums from the 18% Goods and Services Tax (GST), effective September 22. The reform also extends to reinsurance costs, a move that could
reduce pricing pressures in the insurance industry.
While the zero-GST regime officially takes effect later this month, insurers and online platforms say customers do not need to wait until September 22 to benefit.
They can buy their policies now without paying GST, though their coverage will begin only from the effective date. Industry executives say this is particularly important as underwriting and policy issuance can take time.
Anand Roy, MD and CEO, Star Health and Allied Insurance, said, “The GST
exemption on health insurance premiums is a landmark reform that will make protection more affordable and accessible for millions of Indians. While the reforms officially take effect from September 22, Star Health and intermediaries have come together to innovate and ensure that customers don’t have to wait. Since September 5, customers can buy their health insurance policies without paying GST, with their coverage beginning from September 22. By enabling customers to lock in their protection now—well ahead of the reform date—we are removing any friction in the buying process and ensuring families remain covered without delay."
Policybazaar echoed the sentiment.
Sarbvir Singh, Joint Group CEO, PB Fintech, said,“The government’s decision to reduce GST on health and term insurance premiums from 18% to 0% is a progressive reform. While the new GST regime officially goes live on September 22, the insurance industry has come together and worked to make 0% GST for customers feasible immediately."
However, industry representatives also highlight pending concerns.
The Life
Insurance Council is expected to meet the Insurance Regulatory and Development Authority of India (IRDAI) toseek support before approaching the government.
Their demands include making the GST changes prospective rather than retrospective and allowing input tax credit (ITC) on renewal premiums.
Insurers say that while reinsurance has been exempted, commission expenses remain taxable, creating an inverted duty structure.
Analysts expect uneven impacts across the sector: health insurers may see higher loss
ratios, life insurers could face margin pressures, and online aggregators may be affected by reduced commissions.
While the zero-GST regime officially takes effect later this month, insurers and online platforms say customers do not need to wait until September 22 to benefit.
They can buy their policies now without paying GST, though their coverage will begin only from the effective date. Industry executives say this is particularly important as underwriting and policy issuance can take time.
Anand Roy, MD and CEO, Star Health and Allied Insurance, said, “The GST
Policybazaar echoed the sentiment.
Sarbvir Singh, Joint Group CEO, PB Fintech, said,“The government’s decision to reduce GST on health and term insurance premiums from 18% to 0% is a progressive reform. While the new GST regime officially goes live on September 22, the insurance industry has come together and worked to make 0% GST for customers feasible immediately."
However, industry representatives also highlight pending concerns.
The Life
Their demands include making the GST changes prospective rather than retrospective and allowing input tax credit (ITC) on renewal premiums.
Insurers say that while reinsurance has been exempted, commission expenses remain taxable, creating an inverted duty structure.
Analysts expect uneven impacts across the sector: health insurers may see higher loss
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