Policyholders are unlikely to get full benefit from GST exemption; premiums likely to rise with no ITC benefit

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Starting September 22, 2025, individual health and life insurance premiums are GST-exempt, but insurers have lost their ITC eligibility on operational services like brokerage and commissions, except for reinsurance-related services. This shift may increase insurer costs, potentially leading to higher premiums for policyholders. Many reports suggest that while public insurers may fully pass on GST benefits, while private insurers might reduce intermediary costs.