Source: The Economic Times
New Delhi / Thrissur, September 2025: Taxpayers and policyholders alike are set to benefit from two significant changes related to GST. South Indian Bank has introduced UPI-based GST payment services on the GST portal. Insurers are working on methods to pass along the benefit of the recent GST cut on life and health insurance policies.
New service launched by South Indian Bank
Thrissur-based South Indian Bank (SIB) has recently launched a service for taxpayers to pay their Goods and Services Tax (GST) using the Unified Payments Interface (UPI). Taxpayers can either scan a QR code or input a Virtual Payment Address (VPA) to make the payment.
Biji SS, SGM & Head – Branch Banking, said: “UPI is the most preferred mode of payment today. This integration allows taxpayers, including both our customers and non-customers, to pay GST via UPI through South Indian Bank. With this option, taxpayers can complete their transactions securely and effortlessly from anywhere.”
“Insurance companies will take some time to come to a consensus on pricing, especially on new products. The rate cut benefit will be passed on renewals, even though there might be a revision in renewal terms,” Mr. Gupta said
The bank is approved by the Reserve Bank of India (RBI) as an Agency Bank and was approved the Central Board of Indirect Taxes & Customs (CBIC) to collect indirect taxes. Before this launch, SIB accepted GST payments through internet banking and at bank branches.
Insurers on GST reduction
In an insurance-related commentary, Edme Insurance Brokers Ltd., formerly Aditya Birla Insurance Brokers Ltd. (ABIBL), said “With the reduction of GST on premiums on individual life and health insurance policies to zero, insurers cannot avail input tax credit. Earlier, insurers availed the income tax credit on GST on insurance premiums and used it for brokerage, commission and overhead purposes.”
“How much of the GST cut benefit will be passed on to consumers will depend on how the insurers adjust their pricing to align with the absence of input tax credit. The entire benefit might not be passed on, but the best possible option would be passed on to the consumers,” he said.
Jonika Jain, the Chief Human Resources Officer for Edme Insurance Brokers, said that after Edme acquired the India operations of UIB, a UK-based broker, they became the third largest insurance broker in India. Edme is planning to double their workforce to 1,000 in five years and is also planning expansion in the UAE, UK, and Singapore.
The overall picture
These two developments highlight the impact of the GST changes on businesses and consumers. The UPI facility from South Indian Bank provides easier tax payment options while the GST reductions mean more people would be likely to buy health and life insurance cover.
