GST Return on Health Insurance for NRIs

Explore the GST returns on health insurance for Non-resident Indians.
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3 min
28-March-2024

The Goods and Services Tax (GST) has been a pivotal reform in the Indian tax structure, streamlining multiple indirect taxes into a unified framework. This comprehensive tax system applies to a wide range of goods and services, including health insurance. Non-Resident Indians (NRIs), who often procure health insurance policies from Indian providers for themselves or their family members residing in India, are impacted by GST regulations and GST returns. Understanding the applicability of GST returns on health insurance for NRIs, along with the provisions for refunds, is crucial for making informed financial decisions.

Is GST applicable to health insurance for NRIs?

Yes, GST returns apply to health insurance premiums paid by NRIs for policies purchased in India. The tax is levied on the premium amount paid for the insurance policy, which includes health insurance. The GST returns are determined by the Indian government and are subject to change based on policy revisions. NRIs need to stay updated on the GST file process, these rates to accurately calculate their insurance costs.

Guide to GST refunds for non-resident Indians purchasing health insurance from India

NRIs can claim a refund on GST returns paid for health insurance premiums under certain conditions. The Indian tax laws provide provisions for refunding GST on medical insurance to ensure that taxation is fair and does not unduly burden non-residents who may not be utilising services in India to the same extent as residents.

Also, read: GST on health insurance and its impact on insurance premium

How can NRIs claim a refund on GST for health insurance premiums?

To claim a GST on medical insurance refund, NRIs must follow the prescribed procedure, which includes filing returns, providing necessary documentation, and sometimes, a detailed application explaining the claim for a refund. The process can be initiated through the GST portal or by contacting the insurance provider directly, as some companies offer assistance with GST-related queries.

Steps to obtain GST refund on health insurance for NRIs

  • Registration on the GST portal: NRIs need to register themselves on the GST portal to file for a refund.
  • Filing the refund application: The next step involves filing a refund application in the form GST RFD-01, available on the portal.
  • Submission of necessary documents: Attach all required documents with the refund application.
  • Follow-up: After submission, NRIs may need to follow up with the tax authorities or the insurance provider for updates on the refund process.

What are the GST rates on medical insurance premiums in India?

The GST returns on medical insurance premiums, including health insurance, are set by the Indian government. As of the last update, the GST on medical insurance rate for health insurance premiums stands at 18%. This rate applies uniformly to policies purchased by residents and non-residents alike.

What documents are required to get a GST refund on health insurance for NRIs?

The documents required for obtaining a GST returns on health insurance premiums typically include:

  • Copy of the health insurance policy.
  • Payment receipts showing the GST amount.
  • Bank account details for refund processing.
  • A copy of the NRI's passport as proof of non-residency.
  • Any other document as specified by the GST or insurance authorities.

Are NRIs eligible for GST exemption on specific health insurance plans?

NRIs are generally not exempt from GST on health insurance plans. However, certain government schemes or insurance plans designed specifically for low-income groups or specific categories may have exemptions or reduced GST rates. NRIs should consult with their insurance providers or tax consultants to understand if their chosen plans qualify for any exemptions.

Read in detail about: Health insurance for NRI

GST returns on health insurance for NRIs is an essential aspect of financial planning that cannot be overlooked. By understanding the applicability of GST, the procedures for claiming refunds, and the required documentation, NRIs can effectively manage their health insurance costs in India. Staying informed about the latest tax laws and seeking professional advice when necessary will ensure compliance and optimise financial health.

Frequently asked questions

Is GST applicable to health insurance for NRIs?
Yes, GST (Goods and Services Tax) is applicable to health insurance premiums paid by Non-Resident Indians (NRIs) for policies purchased in India. This means that when NRIs buy health insurance for themselves or their families in India, the premium includes GST, similar to policies bought by residents.
How can NRIs claim a refund on GST for health insurance premiums?

NRIs can claim a refund on GST for health insurance premiums by following a specific procedure outlined by the Indian tax authorities. The process generally involves:

  • Registration on the GST portal: NRIs must first register themselves on the official GST portal.
  • Filing a refund application: After registration, they need to file a refund application using the form GST RFD-01 on the portal.
  • Document submission: Along with the application, relevant documents such as a copy of the insurance policy, payment receipts, and NRI proof (like a passport copy) must be submitted.
  • Refund processing: Once the application and documents are verified, the refund process will be initiated by the tax authorities.

It's advisable to check the official GST portal or consult with a tax professional for the most current procedures and requirements.

What are the GST rates on medical insurance premiums in India?
As of the latest update, the GST rate on medical insurance premiums, including health insurance, is set at 18%. This rate is applicable to both health insurance policies purchased by residents and NRIs. Keep in mind that GST rates are subject to change based on government policy, so it's a good idea to stay informed about any updates.
Are NRIs eligible for GST exemption on specific health insurance plans?
Generally, NRIs are not exempt from GST on health insurance plans. However, there may be specific government schemes or insurance plans targeted at low-income groups or certain categories that offer GST exemptions or reduced rates. To find out if a particular health insurance plan qualifies for GST exemption, NRIs should consult with their insurance provider or a tax consultant.
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