FAQs related to GST
What is GST? When was GST implemented?
GST is an integrated tax, merging most of the existing indirect taxes such as Service tax, VAT etc into a single system of taxation. GST works on the concept of “One Nation One Tax”. This is one of the biggest tax reforms in India since Independence and was implemented on July 1, 2017.
Will GST be applicable on NRI customers?
Yes, GST will be applicable to NRI customers, provided the consideration is not received in foreign exchange. In such case, IGST will be charged to NRI customers. Rate for NRI customers will be same as the Resident Indian customers.
Is GST applicable on premiums of all life Insurance Policies?
Yes, GST is applicable on premiums of all insurance policies, except the following:
Janashree Bima Yojana (JBY);
Aam Aadmi Bima Yojana (AABY)
Life micro-insurance product as approved by IRDA having a maximum amount of cover of Rs 50,000/-
Varishtha Pension Bima Yojana
Pradhan Mantri Jeevan Jyoti Bima Yojana
Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Vaya Vandan Yojana
Any other insurance scheme of the State Governments as recommended by the GST Council.
What is the GST rate for Life Insurance policies?
The following are the existing product (category-wise) GST rates*:
- Term Plans/ Health Plans / Riders – 18%
- ULIP Charges / Other Charges – 18%
- First Year / Single Premiums – 4.50%
- Renewal Premiums – 2.25%
- Single Premium Annuity Plans – 1.80%
* Subject to changes in tax laws. Same rates apply to Non-Resident customers (NRIs) as well.
What if a customer has paid his/her premium in advance?
If policy premium is due for payment on or after the roll-out date of GST, then GST will be applicable on premium. If the premium is paid in advance, there would be no implications under the GST law. However, for premium not paid or balance amount due, the same would be taxed at the GST rate.
Will the customer be able to view the GST component paid along with premiums?
Yes, the details of GST paid by the customer on premiums would be disclosed separately on the premium receipts issued under “Taxes and Levies as applicable.