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How is GST calculated on insurance premiums in India?

Asked 18d ago·384 views
I recently purchased a health insurance policy and noticed that GST is charged at 18% on the premium. Can someone explain how this is calculated? Is GST applied before or after the GST-exclusive premium? Also, is there any difference in GST rates between life insurance and general insurance like health or motor?
Asked by Priya Sharma

9 Answers

28
✓ Accepted Answer
GST on insurance premiums is calculated on the net premium amount before GST. For life insurance, GST is 18% on the premium net of GST. For health/motor general insurance, it is also 18%. The GST-exclusive premium is the sum assured divided by 100 multiplied by the premium rate, then 18% is added on top.
Answered by Rajesh Kumar · 21 Feb 2026
28
✓ Accepted Answer
GST on insurance premiums is calculated on the net premium amount before GST. For life insurance, GST is 18% on the premium net of GST. For health/motor general insurance, it is also 18%. The GST-exclusive premium is the sum assured divided by 100 multiplied by the premium rate, then 18% is added on top.
Answered by Rajesh Kumar · 30 Mar 2026
28
✓ Accepted Answer
GST on insurance premiums is calculated on the net premium amount before GST. For life insurance, GST is 18% on the premium net of GST. For health/motor general insurance, it is also 18%. The GST-exclusive premium is the sum assured divided by 100 multiplied by the premium rate, then 18% is added on top.
Answered by Rajesh Kumar · 11d ago
15
To add to the answer above, note that for life insurance policies with a savings component, the GST is only on the protection component (pure risk premium), not on the investment component. This can make the effective GST lower than 18% of the total premium.
Answered by Anita Desai · 24 Feb 2026
15
To add to the answer above, note that for life insurance policies with a savings component, the GST is only on the protection component (pure risk premium), not on the investment component. This can make the effective GST lower than 18% of the total premium.
Answered by Anita Desai · 26 Feb 2026
15
To add to the answer above, note that for life insurance policies with a savings component, the GST is only on the protection component (pure risk premium), not on the investment component. This can make the effective GST lower than 18% of the total premium.
Answered by Anita Desai · 20 Apr 2026
11
Section 3 of the IGST Act 2017 governs GST on insurance. The rate is 18% for both life and non-life insurance. The premium amount you see in the policy document is the GST-inclusive amount, so the GST component is: Premium × 18/118.
Answered by Vikram Mehta · 21 Feb 2026
11
Section 3 of the IGST Act 2017 governs GST on insurance. The rate is 18% for both life and non-life insurance. The premium amount you see in the policy document is the GST-inclusive amount, so the GST component is: Premium × 18/118.
Answered by Vikram Mehta · 24 Feb 2026
11
Section 3 of the IGST Act 2017 governs GST on insurance. The rate is 18% for both life and non-life insurance. The premium amount you see in the policy document is the GST-inclusive amount, so the GST component is: Premium × 18/118.
Answered by Vikram Mehta · 18 Mar 2026

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