GST Relief on Insurance: GoM Seeks Safeguards to Ensure Benefits Reach Policyholders

Last updated: 29 August 2025


Quick Summary
A Group of Ministers (GoM) has broadly agreed to reduce Goods and Services Tax (GST) on individual life and health insurance policies to make them more affordable. While most states support the move, some, including Karnataka and West Bengal, have raised concerns about ensuring that insurance companies pass on the tax relief to policyholders. Safeguards are being sought to prevent misuse and guarantee that the benefits reach consumers, with an estimated annual revenue impact of around ₹9,900 crore.

The Group of Ministers (GoM) on Life and Health Insurance, chaired by Bihar Deputy Chief Minister Samrat Choudhary, met on Wednesday to deliberate on the Union government's proposal to reduce GST on individual life and health insurance policies. The GoM broadly agreed that easing the GST burden is
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FAQ :

The GoM met to discuss the Union government's proposal to reduce GST on individual life and health insurance policies.

The GoM broadly agreed that reducing the GST burden is important for making insurance more affordable for individuals.

States including Karnataka, West Bengal, Kerala, Punjab, and Tamil Nadu raised concerns about ensuring policyholders receive the benefits.

Their main concern is ensuring that insurance companies pass on the GST relief to customers and do not retain the gains themselves.

The proposal could have a significant revenue impact, estimated at approximately ₹9,900 crore annually.

The GoM recommended that the final decision be made by the GST Council after considering all formal submissions from the states.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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