Pension Services Under SAC Code 997131
Life insurance services provide financial protection to families by paying a sum assured or benefits when the life insured dies or on maturity of the policy. Policyholders pay premiums regularly and insurers manage risk and investments to honour these promises. Under GST, such life insurance services are classified under SAC 997131. This SAC code and its GST treatment decide how GST applies on life insurance premiums and related charges.
Pension Services GST Rate for SAC Code 997131
Life, health, general and specialised insurance services under these codes are treated as insurance services under GST. In most standard policies, the premium charged to customers is subject to GST, while certain government notified schemes or social security type covers may enjoy concessional or exempt treatment.
After the September 2025 rationalisation, taxable insurance premiums for regular commercial and retail policies are generally placed in the 18 % slab with input tax credit for business policyholders, subject to specific conditions. Concessional or exempt treatments for selected life and health products continue as per the latest GST notifications and circulars.
The table below explains the broad GST treatment for SAC code 997131, showing the standard 18 % slab for taxable insurance premiums and special cases where notified benefits apply.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 997131 | pension services | 0% without ITC or 18% with ITC | 0% without ITC or 18% with ITC | Certain notified pension schemes (for example Atal Pension Yojana and specified State Government pension schemes) are exempt at 0% under existing exemption notifications, while other taxable pension services fall in the 18% slab. The 56th Council changes did not alter this pattern, so old and new rates remain effectively the same, only the overall slab framework changed. |
Insurers and intermediaries using this SAC code should split premium, GST and any stamp duty or other levies clearly on policy documents and invoices. They should mention the GST rate in %, use the correct SAC and ensure the same treatment is reflected in GSTR 1 and GSTR 3B so that business customers can manage input tax credit and compliance properly.
Explore Other SAC Codes Under 9971
These SAC codes sit inside the financial and insurance services group 9971, which covers central banking, deposit services, credit granting, investment banking and various life and non life insurance products. Each six digit SAC identifies a specific set of financial or insurance activities for GST reporting.
Below are the major related six-digit SAC codes under parent 9971
Banks, NBFCs, insurers and intermediaries should map each product to the correct SAC, checking whether the income is fee based and taxable or interest or risk cover that may have special treatment. Proper SAC selection and correct GST rate application in % reduce disputes, help customers claim input tax credit on eligible charges and keep GST returns easier to justify during audits.
Conclusion
Life insurance services under SAC 997131 provide long term financial protection to families. While many life insurance premiums are taxed at 18 % on the risk or service portion, selected schemes may enjoy concessional or exempt treatment. Insurers should separate taxable and specially treated products carefully, apply the correct GST rate in % on the taxable part and use SAC 997131 consistently in policy documents and GST returns so that customers and regulators get clear disclosures.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.
Frequently Asked Questions
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What is SAC code 997131 in GST for pension services?
SAC 997131 covers pension fund management and retirement plan administration services. It includes managing pension assets, record keeping, actuarial support and other services given by pension fund managers or administrators to employers, trusts and retirement schemes.
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Does SAC 997131 cover pension fund management and retirement planning services?
Yes. Services like investment management of pension funds, scheme administration and related advisory are classified under SAC 997131. Retail retirement planning advice may also be grouped here when it is part of the pension fund management or organised retirement scheme support activities.
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What is the GST treatment of pension fund management charges under SAC 997131?
Pension fund management and similar services are generally taxable at 18% on the fees charged, unless a specific exemption applies for certain regulated funds. The contributions or pension payouts themselves are not subject to GST, only the service fee portion charged by managers or administrators.
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Are employer sponsored pension schemes billed using SAC 997131?
Yes. When an employer engages a pension fund manager or administrator and pays management fees for running an employee pension scheme, those charges are usually invoiced under SAC 997131. Any GST charged on such management fees is paid by the employer as the service recipient.
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Can organizations claim ITC on taxable SAC 997131 services?
Where an organisation is registered under GST and uses pension fund management services in relation to its taxable business activities, it may be able to claim ITC on GST paid, subject to conditions. However, rules can vary and some employers may treat such costs as part of employee benefits.