Kerala HC Stays Collection of GST on Health Insurance Premiums for Union Bank Retirees [Read Order]

The Kerala High Court has granted interim relief to Union Bank of India retirees by staying the collection of 18% GST on their health insurance policy renewals for the policy year 2025-26. The Court clarified that this relief is temporary and "subject to the further orders to be passed by this Court."

A group of individual retirees and the All India Union Bank Pensioners & Retirees Federation filed a writ petition challenging the 18% Goods and Services Tax (GST) levied on the renewal of their health insurance policies. The petition was filed against the Union of India, the GST Council, and Union Bank of India. The petitioners sought a stay on the collection of the tax and requested an extension of the renewal deadline, which was October 9, 2025.

The core issue before the Court was whether the petitioners could be compelled to pay the 18% GST on their health insurance premiums while their legal challenge against the levy was pending.

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The Single Bench of Justice Ziyad Rahman A.A. heard arguments from the petitioners' counsel. While the counsel for the Union of India was present, the Standing Counsel for Union Bank of India was directed to obtain instructions on the matter.

In its interim order, the Court permitted the petitioners to renew their insurance policies for the current year by paying only the base premium, without the 18% GST component. The court has recognised the petitioners' argument and has chosen to maintain the status quo (i.e., not collecting the new tax) until it can hear the full case and make a final decision. This prevents the petitioners from suffering a potential financial loss if they were to pay the tax and then later win the case.

The Court clarified that this relief is temporary and "subject to the further orders to be passed by this Court." The case was posted for further hearing on October 21, 2025.

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