GST exemption is for individual health insurance policies and the policies of retirees are equivalent to a group policy issued on the basis of “the agreement reached between the Indian Banks’ Association and the insurance company, followed by collective bargaining,” the judge said in the order.
“Thus, for all practical purposes, the Indian Banks’ Association acted as an intermediary and after collective bargaining, better premium rates were fixed with additional benefits, which were otherwise not available to individual policyholders. Apart from the above, this particular policy is issued for the benefit of the pensioners of various banks, who formed a class in themselves, by reason of their previous employment with the banks,” the judgment said.
While the GST Council has not exempted GST for group health insurance policies, a Kerala High Court had earlier issued an interim stay order in October to exempt GST for group policies of retired bankers, a move that offered hope to the senior citizens.
The petition was filed by the All India Bank Pensioners & Retirees’ Confederation and other persons in relation to the group health insurance policy of the Indian Banks’ Association (IBA), which is jointly administered by the IBA and the National Insurance Company. About 1.5 lakh retired bankers had opted for this group policy last year.
The passed order then directed a group of banks, including Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank and others, to renew health insurance of pensioners without GST.
Experts told it then business line that while the decision of the GST Council is clear on group policy, from a social justice perspective, extending the exemption to extensions of group health care for such seniors would be in keeping with the spirit of the Council’s decision.
Published on January 9, 2026
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