Archive · 20 Aug 2025
India Proposes GST Exemption on Insurance Premiums
The government is considering making health and life insurance cheaper.
They want to remove the tax (GST) on the premiums that people pay.
This is meant to help more people afford insurance.
A group of ministers is discussing this and will give their recommendation to a larger council that will make the final decision.
Some states have concerns, but the proposal aims to lower the cost of insurance for individuals and families.
The Centre proposed exempting individual and family health and life insurance premiums from GST.
Currently, premiums are taxed at 18% GST.
The Group of Ministers (GoM) will submit a report with the proposal to the GST Council.
Some states support the exemption but want mechanisms to ensure benefits reach consumers.
The GST Council will make the final decision on the proposal.
- Who
- Centre, GoM, GST Council, state representatives.
- What
- Proposal to exempt individual and family health and life insurance premiums from GST.
- When
- Final decision to be made by the GST Council; report submission by GoM by October end.
- Where
- India
- Why
- To increase insurance affordability and penetration as part of a larger GST reform.
Proponents
Opponents
Impact on Consumers and States
Proponents
Increased insurance affordability and penetration.
Opponents
Potential revenue loss for states.
Benefit Sharing
Proponents
Consumers benefit from lower rates.
Opponents
Mechanism needed to ensure benefits reach the people.
- Event
- GST Exemption Proposal
- Proposed Change
- Exemption on Individual/Family Health & Life Insurance Premiums
- Current GST Rate
- 18%
- Proposer
- Centre/GoM
- GST Council Decision
- Pending
- Revenue Loss Estimate
- ₹9,700 crore (annual)
Sources
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