HSN Code for Insurance in India: SAC Codes and GST Rates

The rate depends on the policy and any applicable exemption. Individual life and health insurance policies became GST-exempt from 22 September 2025. Group insurance remains taxable at 18%. A specific 5% rate applies to third-party insurance of a goods carriage. 

Notification No. 16/2025–Central Tax (Rate), dated 17 September 2025, introduced the individual life and health insurance exemptions. The Department of Financial Services’ guidance confirms their effective date and the continued 18% rate for group policies. The government’s September 2025 rate explanation records the reduction from 12% to 5% for third-party insurance of goods carriages. 

The 5% goods-carriage entry is specific. It should not be applied to every motor policy or every type of cover included in a combined policy.

A SAC classifies a service, while a notification sets its rate or exemption and conditions. Both an individual health policy and an employer-sponsored group health policy can involve SAC 997133. The individual policy is exempt under the September 2025 change, whereas the employer-sponsored group policy continues to attract 18% GST. The code alone cannot resolve that difference. 

For a business buying employee cover, the practical check is whether the insurer has issued a group contract or an individual policy. The number of people covered does not, on its own, answer that question: the government’s guidance expressly includes qualifying family floater policies in the individual health exemption. 

Match the policy and invoice to the correct SAC and tax provision. A business reviewing an insurance charge can follow these steps:

• Identify the cover: life, health, motor, marine, freight, property or another type.
• Check whether the insured is an individual, an individual with family, or a group.
• Compare the policy with the official SAC classification.
• Check the applicable rate or exemption, including its effective date and conditions.
• Compare the policy schedule and insurer’s invoice for the SAC, premium, taxable value and GST charged.

If those documents conflict, ask the insurer to explain or correct the invoice before using it in GST records. A business should assess input tax credit separately; GST appearing on an invoice does not automatically establish an eligible claim.

At an assumed taxable premium of Rs. 1,00,000 for an employer-sponsored group health policy, GST at 18% would be Rs. 18,000. The total payable would be Rs. 1,18,000. The example assumes the full Rs. 1,00,000 is the taxable value, with no adjustment or separately charged item. Confirm the actual policy and invoice rather than applying the calculation to an exempt individual policy. 

A business may renew commercial vehicle, property or group employee cover while paying suppliers, wages and equipment costs. Checking the GST treatment establishes the amount invoiced for insurance; planning those payments against expected receipts shows whether the business has a wider funding gap.

For such operating requirements, the Bajaj Finance Business Loan offers amounts from Rs. 2 lakh to Rs. 80 lakh and tenures from 12 months to 96 months, subject to eligibility and approval.

Applicants need know-your-customer (KYC) documents, a Permanent Account Number (PAN) card and proof of business ownership. Additional financial documents may be required based on the application. Check the current document requirements before applying. 

To apply:

• Visit the Business Loan page and select “Check Loan Offer”. Enter your mobile number and complete one-time password (OTP) verification.
• Provide personal and business details, including applicable identification and banking information.
• Enter the required loan amount and select the applicable loan variant.
• Select the repayment tenure.
• Review the information and submit the application. 

Estimate the complete funding requirement and compare the total borrowing cost and repayments with expected business cash flow.