By Shilpy Sinha
Copyright indiatimes
Mumbai: Insurers are going to seek clarity from the Centre on the scope of GST exemption for life and health covers after the GST Council scrapped the indirect tax on individual policies but retained the levy on certain adjacent product lines.Life insurers want clarity on credit life policies, which are technically individual covers but structured as group contracts by lenders to repay outstanding loans in case of a mishap. Insurers say that these policies should qualify for exemption but were not explicitly mentioned in the GST Council’s notification. “What has been mentioned outright is that the exemption is for individual life and health policies. There is no mention of corporate or group policies, which are taken by an individual, and premium paid by an individual,” a senior industry executive said. The GST Council moved all individual life and health insurance policies to the nil tax category, effective September 22. The exemption covers term, unit-linked and traditional life insurance products, as well as health covers such as family floaters and senior citizen plans.Another grey area is corporate health covers, where the employer pays the base premium, but employees contribute toward top-up plans. Since employees fund the top-up themselves, insurers say these should also be treated as individual policies and qualify for exemption.Similarly, there is uncertainty around travel insurance, which currently attracts 18% GST. “From what we understand, the nil rate is applicable only to life and health insurance, not other categories and the industry is planning to seek clarifications,” another executive added.Live EventsPreviously, GST was levied at multiple rates. This included an 18% tax on term and ULIPs, 4.5% tax on first-year traditional plans and 2.25% on renewals.Add as a Reliable and Trusted News Source Add Now!
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Read More News onGST exemption for life insurancecredit life policies and GSTInsurancePremiumCreditimpact of GST on health insuranceindividual vs group insurance policiesclarification on corporate health coverstravel insurance GST ratelife insurance tax categories
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onGST exemption for life insurancecredit life policies and GSTInsurancePremiumCreditimpact of GST on health insuranceindividual vs group insurance policiesclarification on corporate health coverstravel insurance GST ratelife insurance tax categories(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
