Do not delay in paying the policy premium; otherwise, you may have to pay the price in the pursuit of saving GST.

Insurance Policy Premium: If the renewal date of the policy is before 22 September, then you should make the payment without any hesitation. If you do not do this, you will cause loss to yourself.

Insurance Policy Premium: The government has decided to remove GST on health and life insurance policies. From 22 September, GST on insurance premiums will be completely abolished. Earlier, GST was levied on them at the rate of 18 percent, but now, under the new rule, people will be able to buy policy without GST. Now the confusion is about this. Since the benefit of GST exemption on insurance premium is going to be available from 22 September, people feel that by depositing the premium after this date or on this day, GST will not have to be paid, whereas in reality it is not so.

If the renewal date of the policy is before 22 September, then you should make the payment without any hesitation. If you do not do this, you will cause loss to yourself. You may be deprived of many benefits like no-claim bonus, renewal discount. If the renewal date of the policy is before 22 September and the invoice has also been issued by the insurance company, then according to the old rules, you will have to pay GST on the premium, even if you make the payment after 22 September in order to save GST. However, if the invoice is generated on or after 22 September, then you will be able to avail the benefit of GST exemption.

From 22 September, policyholders will be completely free from 18 percent GST on health and life insurance premiums. This will reduce the burden of expenses to a great extent. On a premium of Rs 1,000, currently Rs 1,180 has to be paid with GST. Now, after the removal of GST, only Rs 1,000 will have to be paid. However, there is a catch in this. With GST reforms, insurance companies will no longer be able to claim input tax credit (ITC) on many of their operational expenses such as agent commission, reinsurance and advertising. This may lead some insurance companies to increase their base premium slightly, which will not allow them to avail the full benefit of tax exemption.