Life Insurance Services Under SAC Code 997132
Health insurance services provide cover for hospitalisation, surgeries and medical expenses for individuals and families. Policyholders pay premiums and insurers reimburse or settle claims with hospitals as per the policy terms. Under GST, such health insurance and mediclaim services are classified under SAC 997132. This SAC code and its GST treatment decide how GST applies on health insurance premiums and service charges. These policies help families manage sudden medical costs without disturbing long term savings.
Life Insurance Services GST Rate for SAC Code 997132
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 997132, 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 |
|---|---|---|---|---|
| 997132 | Life insurance services (excluding reinsurance services) | 0% without ITC or 18% with ITC | 0% without ITC or 18% with ITC | Before 22 Sep 2025, some specified government life insurance schemes were already exempt, but most commercial life policies were taxed at 18% with ITC. From 22 Sep 2025, all individual life insurance policies (term, ULIP, endowment etc.) are fully exempt at 0% (no ITC), while group life insurance remains taxable at 18% with ITC. This expansion of exemption is based on the 56th Council press release and subsequent government FAQs. |
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
Health insurance services under SAC 997132 help families manage medical expenses. Standard retail and group health policies are generally taxable at 18 % on the premium, while certain government backed schemes may have different treatment. Insurers and intermediaries should classify products correctly, apply the right GST rate in %, show GST separately on documents and keep the same approach in GST returns to avoid disputes during scrutiny.
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.