Life and health insurance premiums: What the latest GST clarification means

The Central Board of Indirect Taxes and Customs (CBIC) on Tuesday (September 16) issued a clarification on the new GST rates applicable to insurance services.

What the CBIC said?

Exemption under GST will apply to individual life and health insurance policies.

The exemption is valid when such services are provided to an individual, or an individual along with his/her family.

This means policies bought by individuals for themselves or their family members will not attract GST.

However, CBIC made it clear that the exemption is not available for group insurance policies. For instance, corporate group health covers or employer-provided group life insurance will continue to attract GST as per applicable rates.

What this means for you?

If you are a corporate buying a group policy for employees → GST applies.

If you are an individual buying a life or health insurance policy for yourself or your family → GST exemption applies.

This clarification is expected to bring relief to households and individuals purchasing insurance for personal protection, while keeping group and corporate insurance under the GST net.

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