New Delhi: From 22 September 2025, revised GST rates on several goods and services have come into effect, based on the GST Council’s decisions. The changes aim to simplify rates, remove anomalies, and make the system easier for both businesses and consumers.
The GST reform includes a historic reduction in taxes on over 390 items. From zero GST on life insurance, health insurance, senior citizen policies, 33 life-saving drugs, and diagnostic kits, to minimal GST on oxygen, surgical instruments, medical, dental, and veterinary devices, the GST reform will lead to a historic increase in the savings of the people, the government has said.
However, some policy-holders will not be still availing the benefits of Nil GST. The reason? A policyholder with an existing policy will only get relief on future premiums.
This means GST exemption can be availed only when the policyholder pays his/her next premium after September 22. On old or previously paid premiums, there will be no benefits. In other words, the GST benefits can only be availed on the next renewal premium.
If you have paid advance premium, there will not be a refund either.
Meanwhile, here are 3 quick FAQs you need to check
Which life insurance policies are covered under the GST exemption?
The exemption applies to all individual life insurance policies, including term plans, endowment policies, and ULIPs. Reinsurance of these individual policies is also exempt.
Which health insurance policies are covered under the GST exemption?
Individual health insurance policies, including family floater and senior citizen plans, are exempt from GST. Reinsurance of such individual policies is also exempt under this decision.
In addition to exempting individual health and life insurance services, will any input services of insurers also be exempted?
Only reinsurance services are exempt. Other inputs such as commissions and brokerage remain taxable, and insurers cannot claim ITC on them once the output supply is exempt. Such ITC will have to be reversed.