The Kerala High Court recently addressed a case involving retired bank employees and pensioners' associations who challenged the imposition of GST on Group Health Insurance Policies provided through banks. The petitioners argued that a notification issued after the 56th GST Council Meeting in September 2025, which granted exemptions to certain health insurance services, should apply to their group policies. Despite this notification, banks and insurers continued collecting GST on premiums paid by retirees, leading to claims that the exemption denial was arbitrary and against the GST Council's intent.
The central issue was whether the GST exemption for health insurance policies extended to group policies for retired bank employees. The court concluded that the exemption under Clause 36D of Notification No. 12/2017 (as amended) is limited to individual health insurance policies, including family floater policies. Group insurance policies, even if covering retirees or senior citizens, are explicitly excluded from this exemption.
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The court emphasized that exemption notifications must be interpreted strictly, and benefits cannot be extended beyond their explicit terms. The GST Council's intention was to provide relief solely for individual policyholders, not for group insurance arrangements. Consequently, all writ petitions were dismissed, and the GST levy on group health insurance premiums was upheld, affirming that such policies remain taxable.
Parties: E.P. Gopakumar & Ors. v. Union of India & Ors.
Order Date: 08 January 2026
Facts –
- The petitioners, comprising retired bank employees and pensioners’ associations, challenged the levy of GST on Group Health Insurance Policies taken through their respective banks.
- Reliance was placed on Notification G.S.R. 666(E) dated 17.09.2025, issued pursuant to the 56th GST Council Meeting, granting exemption to certain health insurance services.
- Despite the notification, banks and insurers continued to collect GST on group insurance premiums paid by retirees.
- The petitioners contended that denial of exemption was arbitrary and contrary to the intent of the GST Council.
Issue –
- Whether GST exemption granted to health insurance policies extends to group health insurance policies taken by retired bank employers?
Order –
- The High Court held that the exemption under Clause 36D of Notification No. 12/2017 (as amended) applies only to individual health insurance policies, including family floater policies.
- Group insurance policies, even if covering retirees or senior citizens, are specifically excluded under the definition contained in the notification.
- The Court observed that exemption notifications must be strictly interpreted, and no benefit can be extended beyond their express terms.
- It was held that the GST Council intended relief only for individual policyholders, not group insurance arrangements.
- All writ petitions were dismissed, and levy of GST on group health insurance premiums was upheld.
