High Court Ruling: No GST Exemption for Group Health Insurance?
GST on Group Health Insurance | High Court Ruling Explained
Introduction A significant judgment delivered on January 10, 2026, by the Kerala High Court has clarified the scope of GST exemptions on health insurance premiums. For startups and corporates in Gurgaon and Noida providing coverage to employees, this is a must-read update.
The Ruling Explained The Court examined Notification No. 16/2025 and held that the GST exemption is restricted strictly to individual health insurance policies.
- The Issue: Petitioners (retired employees/groups) argued their group policy should be exempt.
- The Verdict: The Court ruled that “Group” policies do not fit the specific exemption criteria meant for individuals. Therefore, 18% GST remains applicable on premiums paid for Group Health Insurance.
Why This Matters for Employers If you are an MSME or Startup providing Group Medical claims (GMC) to your team:
- Input Tax Credit (ITC): Remember that ITC on health insurance services is generally blocked under Section 17(5) unless it is obligatory under a specific law for the time being in force.
- Cost Implication: This ruling confirms there is no immediate relief on the GST cost component of these premiums.
GSTAT (GST Tribunal) Update In other news, the GST Appellate Tribunal (GSTAT) is becoming functional with members joining on Jan 21, 2026. This is great news for Noida businesses with pending appeals; you can finally expect hearings to expedite litigation that has been stuck for years.
Consult a Specialist Navigating blocked credits and tribunal appeals requires precision. Contact our Indirect Tax team for a case-specific review.
