Archive · 16 Sep 2025
CBIC Rules on GST for Insurance and Hotels
Imagine the government made some new tax rules.
Now, insurance companies can't get a tax break on commissions for certain policies.
Also, hotels that charge less than a certain amount for rooms have to charge a small tax, but can't get a refund on their expenses.
If you use a delivery service, the delivery company is responsible for the tax.
Basically, these rules change how taxes work for insurance, hotels, and deliveries.
CBIC announced changes to GST rules.
Insurers won't get ITC on commissions for individual health and life policies.
Individual health and life insurance are exempt from GST.
Hotels with lower room tariffs must charge 5% GST, without ITC.
E-commerce operators (ECOs) liable for GST on certain local delivery services.
- Who
- CBIC (Central Board of Indirect Taxes & Customs), Insurers, Hotels, E-commerce Operators (ECOs)
- What
- New GST rules regarding Input Tax Credit (ITC) and exemptions.
- When
- Announced on September 16, 2025 (based on previous GST Council meeting)
- Where
- India
- Why
- To clarify and modify GST regulations for specific sectors.
- Key Change
- Insurers won't get Input Tax Credit (ITC) on commissions for individual health & life policies.
- Insurance Exemption
- Individual health and life insurance policies are exempt from GST.
- Hotel Tax
- Hotels with room tariffs ≤ ₹7,500 charge 5% GST without ITC.
- ITC Reversal
- Service providers must reverse ITC on inputs used for exempt services.
- ECOs
- ECOs are liable for GST on local delivery services when the supplier isn't registered (taxed at 18%).
- Rental Services
- Leasing/renting services are taxed the same as the goods they resemble.
Sources
Insurance firms quietly hiking premiums after GST cut? Investor urges PMO action on IRDA
Pass on GST cut benefits fully: Finance ministry to insurers
DFS Secy urges insurers to step up outreach on GST-exempt policies
ITC on agenda as insurance CEOs to meet Irdai chief tomorrow
Finance Ministry Directs Insurers To Fully Pass On GST Cut Benefits
Centre directs insurance companies to pass on GST benefits to policyholders
Automakers Asked To Display Price Posters With Modi Pic
GST exemption to give big push for retail health insurance penetration: Medi Assist CEO
What is the mis-selling of mutual funds, insurance, and financial instruments? How to avoid it?
