The Kerala High Court issued notice on a plea alleging Star Health and Allied Insurance Company Limited failed to reduce premiums despite GST exemption on health insurance, with petitioner Lawrence Joseph claiming he paid nearly the same amount after the policy change.
KERALA: The Kerala High Court issued a notice concerning a petition that questions whether the Central government’s recent decision to exempt individual health insurance policies from goods and services tax (GST) is being implemented effectively.
The petitioner has accused his health insurance provider, Star Health and Allied Insurance Company Limited, of profiteering by not reducing the premium after the GST exemption took effect. Lawrence Joseph, a resident of Ernakulam, claims that the premium he was required to pay post-exemption is nearly the same as what he paid before the exemption was enacted.
He argues that Star Health has not passed the benefits of the tax exemption down to policyholders, despite the GST on individual health insurance policies being slashed to zero in September 2025. Among other requests, his petition calls for strict enforcement of anti-profiteering rules under GST legislation.
Justice Ziyad Rahman AA has asked for responses from the Central government, GST authorities, and Star Health. Joseph, who runs a law book agency near the Kerala High Court, has held a family floater health insurance policy from Star Health for himself and his spouse since 2017.
According to the petition, his insurance premium for the policy period of 2023-2024 before September 2025 was Rs 37,906, which included an 18 percent GST amounting to Rs 5,782 on the base premium.
On September 17, 2025, the Central government issued Notification No 16/2025, granting complete GST exemption on individual life and health insurance policies effective from September 22, 2025.
Despite this exemption, the petitioner asserts that Star Health demanded a premium of Rs 37,103 for the policy period starting November 9, 2025, which is nearly identical to the previous premium when GST was applicable. This indicates that the tax reduction benefits have not been transferred to policyholders, he points out.
The petitioner further argues that this situation constitutes unjust enrichment and profiteering, as the insurance company has wrongfully retained the tax benefits instead of passing them on to policyholders. This, he claims, contradicts GST laws.
The petition notes,
“The failure of the Respondent to correspondingly reduce the premium after the removal of GST amounts to illegal retention of tax benefit, unjust enrichment, and profiteering, directly contrary to the express mandate of Section 171 of the Central Goods and Services Tax Act, 2017,”
The petitioner references Section 171 of the CGST Act, which addresses anti-profiteering measures and mandates that any tax rate reduction must be passed on to consumers by lowering prices accordingly. He also cites Rule 127 of the CGST Rules, which empowers authorities to determine whether tax benefits have been transmitted to customers.
Additionally, the petitioner has called out the inaction of the Central government and GST Council in ensuring proper enforcement of anti-profiteering provisions, arguing that this inaction is arbitrary and violates Articles 14 (right to equality) and 21 (right to life) of the Indian Constitution.
He has thus urged the Court to declare that collecting insurance premiums without passing on the GST exemption benefits to policyholders is illegal and arbitrary. Furthermore, he requests the Court to mandate authorities to enforce anti-profiteering provisions actively and to direct Star Health to refund the excess premium collected from him, along with interest.
Advocates Raghul Sudheesh, J Lakshmi, Ambily T Venu, Rachel Mary Jacob, Athulya Vaishnavi, and Navaneeta Manu represented the petitioner.
Case Title: Lawrence Joseph v Union of India & ors.
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