GST on Loans & Insurance: Are You Overpaying?

The GST Council meets October 7 but no rate cuts are expected. Borrowers and insurance buyers keep paying 18% GST on loan fees, credit card charges, and insurance premiums. Here's what that costs you and where to watch for relief.

Here's what happened: The GST Council is scheduled to meet on October 7, with the agenda focused on reviewing implementation of past rate changes rather than announcing new rate cuts.. Financial services including personal loan processing fees, insurance premiums, and credit card charges continue to attract 18% GST, directly raising borrowing costs for households.. Process reforms — such as streamlining compliance, reducing disputes, and improving refund timelines — are the primary focus, offering indirect relief to small business borrowers over time..

What you should do: Calculate your true loan cost: add 18% GST on the processing fee to your EMI comparison before choosing between two lenders — it can shift the cheaper option.. Check your insurance renewal invoice for the GST line item and budget it separately — for a ₹20,000 family health policy, that is ₹3,600 extra annually.. Ask your lender for a fee-waiver on processing charges during festive offers — a waived processing fee eliminates the GST on it entirely, saving you real money..

GST paid on life and health insurance premiums can be claimed as a deduction under Section 80C and 80D respectively — most policyholders forget the premium amount eligible includes the GST component.