In a disappointment for bank retirees, the Kerala High Court on Thursday dismissed their petition to grant them GST exemption on their health insurance premium on their IBA group policy.
GST exemption is intended for individual health insurance policies and the retirees’ policies is equivalent to a group policy issued based “on the understanding reached between the Indian Banks’ Association and the insurance company followed by collective bargaining,” the Judge said in the order.
“Thus, the Indian Banks’ Association, for all practical purposes, was acting as an intermediary and after collective bargaining, better rates of premium were fixed with additional benefits, which were not otherwise available for individual policyholders. Apart from the above, this particular policy is issued for the welfare of the retirees from various banks, who by themselves formed into a class, on account of their prior employment with the banks,” the Judgement said.
While the GST Council has not exempted GST on group health insurance policies, a Kerala High Court had earlier passed an interim stay order in October to exempt GST on group policies of retired bankers, a move that offered hope to the senior citizens.
The writ petition was filed by the All India Bank Pensioners & Retirees’ Confederation and other individuals in relation to the Indian Banks’ Association (IBA) group health insurance policy jointly managed by the IBA and the National Insurance Company. Around 1.5 lakh retired bankers had opted for this group policy as of last year.
The order passed then directed a group of banks, including Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, and others, to renew the retirees’ health insurance without GST.
Experts then told businessline that though the GST Council’s decision is clear on group policies, from a social equity point of view, extending the waiver to group health renewals for such senior citizens would align with the spirit of the Council’s decision.
