CBIC to engage with insurers to work out transition mechanism for ITC on exempt policies: Sitharaman
GST
Dated:- 8-9-2025
PTI
New Delhi, Sep 8 (PTI) The Central Board of Indirect Taxes and Customs (CBIC) will be engaging with the insurance industry to work out a transition mechanism for the accumulated input tax credit (ITC) of those policies which have been exempted from tax with effect from September 22, Finance Minister Nirmala Sitharaman has said.
The GST Council, comprising the Centre and states, in its meeting last week, decided to exempt GST on premiums paid on individual life and health insurance policies with effect from September 22.
Currently, 18 per cent GST is levied on premium payments for such policies.
In a
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,” she said.
The GST Council has approved a two-tier GST structure with rates of 5 per cent and 18 per cent for most goods and services and a special rate of 40 per cent for tobacco and related products as well as ultra-luxury items.
The new rates will be effective September 22, barring tobacco and associated products, will continue to be taxed at 28 per cent plus a compensation cess till December 31.
As part of the rationalisation, GST has been exempted on individual life insurance, including term, ULIP, and endowment plans and reinsurance services. Currently, premium payment on such policies attracts 18 per cent tax.
Currently, GST is levied in the slabs of 5, 12, 18 and 28 per cent.
The government has collected Rs 16,398 crore
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