GOM flags regarding insurance companies that pass the benefits of relief from commodity and services tax are related to document holders

The GOM Group (GOM) gathered on life and health insurance, headed by Deputy Prime Minister at the Bihar of Samarat Ch Xodry, in New Delhi on August 20, 2025, to deliberate in the union’s government’s proposal to reduce the tax and services tax on individual life policies and health insurance.

GOM widely agreed that the burden of goods and services tax must be reduced to make insurance more affordable. Most states supported individual policies exemptions, noting that the union’s proposal is largely and includes previous recommendations made in December 2024.

However, fears by members of the state of Karnataka, Western Bengal, Kerala, Punjab and Tamil Nadu raised whether the benefits of such an exemption will actually reach document holders. They stressed that insurance companies should not achieve gains by blocking relief and insisting on mechanisms to ensure that the benefits are fully transferred to customers. Punjab and Tamil Nadu repeated the support of the previous proposals while emphasizing accountability for insurance companies.

It was also noted that the implementation of the union’s proposal can have a revenue effect of about 9,900 rupees annually. A few members reported the need for guarantees to prevent misuse and ensure transparency in passing interest to the final users.

In conclusion of the discussions, the agreement registered in the principle was registered to alleviate the burden of goods and services tax on insurance, although the different state’s concerns were observed. GOM recommended the final decision by the Commodity and Services Tax Council, with all state views in front of him.