Impact of GST Reform 2.0 on India’s Insurance Industry: A Comparative Analysis of the Pre- and Post-Reform Period

Daizy Atul Solapurwala; Mahesh Trivedi

doi:10.36948/ijfmr.2026.v08i05.87549

Impact of GST Reform 2.0 on India’s Insurance Industry: A Comparative Analysis of the Pre- and Post-Reform Period

Author(s)	Ms. Daizy Atul Solapurwala, Dr. Mahesh Trivedi
Country	India
Abstract	The Goods and Services Tax (GST) is one of the biggest tax reforms in India, which marked a significant transformation in the indirect taxation by subsuming multiple taxes collected separately by state and central government into a unified tax structure. However, concerns regarding 18% GST rate on insurance premium during pre-GST 2.0 specially on life and health insurance led to matter of discussion under the GST 2.0 reforms introduced on September 2025. The revised framework exempted GST on selected products, aiming to improve affordability, insurance penetration and even rationalized the GST rates on insurance products as to strengthen the insurance sector. This study examines the impact of GST rate reformation on the number of policies/ schemes issued, total sum assured and first-year premium by study 18 months observations (9 months pre-GST reform 2.0 and 9 months post-GST reform 2.0) i.e. January 2025 to June 2026. The study is based on secondary data collected from report published by the Insurance Regulatory and Development Authority of India (IRDAI), GST Council publications, Ministry of Finance reports and annual reports of few selected insurance companies. Descriptive statistics, month-wise growth rates, Friedman tests and Wilcoxon signed-rank tests are used to examine monthly variation and differences between the two periods. The results indicate that there is a large amount of month-to-month variability within the chosen indicators over the pre-reform and post-reform period. On average, the first-year premium collected increased from ₹36,213.15 crore to ₹38,655.89 crore, and the average number of new policies increased from 2,259,515.89 to 2,443,474.00. These differences were not statistically significant. The average sum assured increased from 1,006,849.76 to 1,177,154.29, and this difference was statistically significant at the 5% level. These results suggest that GST Reform 2.0 was associated with a short-term increase in the value of insurance coverage, but it does not show that it caused it. The findings of the study will contribute to the literature on indirect taxation and financial services by providing policy-oriented evidence on the economic implication of GST 2.0 for India’s insurance sector.
Keywords	Goods and Services Tax (GST), GST 2.0, GST Rate Rationalization, Indian Insurance Sector, Insurance First-Year Premium, Sum Assured, Insurance Policies.
Field	Business Administration
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-12
DOI	https://doi.org/10.36948/ijfmr.2026.v08i05.87549

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Impact of GST Reform 2.0 on India’s Insurance Industry: A Comparative Analysis of the Pre- and Post-Reform Period

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