Individual insurance premium exemption removes GST from life and health cover, while employer group policies remain taxable with blocked credit.
The exemption applies to new policies and renewals paid on or after that date, even if the renewal date was earlier. GST paid on earlier premiums is not refundable. Insurers cannot claim input tax credit on GST paid on commissions, brokerage and other input services for exempt individual policies and must reverse the credit. Employer-sponsored group health and life insurance and other general insurance, including motor, fire, marine and travel cover, continue to attract 18% GST. An October 2026 recommendation to amend Section 17(5) of the CGST Act would permit employers to claim credit on employee health and life insurance, but the amendment has not yet been passed. (AI Summary)