GST on Insurance Premiums — Life, Health, Vehicle (2026)
GST applies at 18% on most insurance premiums in India. This includes life insurance, health insurance, vehicle insurance, and general insurance. The insurance company charges GST on the premium amount and deposits it with the government.
Quick Reference
Life Insurance
18% (on portion of premium)
Health Insurance
18%
Motor Insurance
18%
SAC Code
997131
ITC
Allowed for business use
GST Rate
18%
SAC 997131–997137
Life Insurance — 18% on First-Year Premium
For traditional life insurance (endowment/money-back), GST is 18% on 25% of the first-year premium, and 18% on 12.5% of subsequent renewal premiums. For pure term insurance, 18% applies on the full premium. For unit-linked (ULIP) policies, 18% on charges (not NAV).
Health Insurance — 18% on Full Premium
18% GST applies on the full health insurance premium — including individual, family floater, senior citizen, and group health policies. There is ongoing discussion about reducing this rate for pure health covers.
Vehicle Insurance — 18%
Motor insurance (third-party and comprehensive) attracts 18% GST on the total premium. Third-party insurance, which is mandatory, is also taxed at 18%.
ITC on Insurance Premiums
ITC is allowed on: (1) insurance for plant, machinery, and commercial vehicles, (2) group health/accident insurance for employees (where it is obligatory under any law). ITC is NOT allowed on: personal vehicle insurance, keyman insurance, and personal health insurance.
Marine and Other Insurance
Marine cargo insurance (for exports) is zero-rated. Marine hull insurance and other commercial insurances attract 18%.
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Only if it is a group health policy taken for employees as a statutory obligation. Personal health insurance premiums paid by an individual or proprietor are blocked credits under Section 17(5).
No. GST applies only on the premium paid, not on the maturity/claim proceeds.
ITC on motor vehicle insurance is blocked under Section 17(5) unless the vehicle is used for: transporting passengers (taxi/cab), transportation of goods, or the business is of dealing in motor vehicles.
