GST 2.0: A New Dawn for Insurance Premiums
Insurance premiums for life and health policies are now cheaper as the 18% GST has been removed following GST 2.0 reforms. Individual health and life insurance policies, including reinsurance, are exempt from GST, effective September 22. The reform aims to make insurance more affordable for policyholders.
- Country:
- India
Insurance premiums are set to become more affordable as the Goods and Services Tax (GST) has been lifted from life and health insurance policies. This change, part of the GST 2.0 reforms, took effect from Monday, offering immense relief to policyholders.
The GST Council, in its 56th meeting, resolved to exempt individual life insurance policies and reinsurance from the 18% GST, a move that has been in place since July 2017. Public sector giants, including the Life Insurance Corporation of India (LIC), have pledged to implement these changes promptly.
Up until fiscal year 2024, the government collected significant revenue from GST on insurance services. However, the removal of GST on these policies aligns with the council's broader initiative to simplify the tax framework, reducing 12% and 28% slabs wherever possible.
(With inputs from agencies.)
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