Kerala HC Grants Interim Relief To Retired Union Bank Employees From GST On Group Health Insurance Premium

The Kerala High Court on Monday granted interim relief to retired employees and family pensioners of Union Bank of India. It directed the Union government, GST authorities, and Union Bank of India not to levy GST on health insurance premiums paid under the group medical insurance policy for the policy year 2025–26.

A Division Bench of Justices V.G. Arun and Harisankar V. Menon passed the order while admitting a writ appeal against a Single Bench decision.

The Bench said, “Till then, there shall be an interim order directing the respondents not to levy GST for the insurance premium paid by the petitioners and similarly placed retirees or family pensioners of Union Bank of India for the policy year 2025-26.”

The court recorded the undertaking given by the appellants that the GST component would be paid if the appeal is decided against them.

The appeal arises from a judgment delivered on January 8, 2026, by Justice Ziyad Rahman.

The Single Judge had dismissed petitions filed by retired bank employees seeking GST exemption on group health insurance premiums.

However, the single bench denied any relief, holding that a 2025 Central Government notification granting GST exemption applies only to individual health insurance policies and not to group policies.

The appellants are retired employees and pensioners of Union Bank of India who are covered under a group medical insurance policy taken by the bank through the Indian Banks' Association to provide post-retirement medical benefits.

Following the introduction of GST, they were required to pay tax on the insurance premium under the group policy, which led them to approach the High Court seeking exemption from the levy.

Their writ petitions were dismissed by a single bench, prompting the present appeal. The Kerala High Court has posted the matter for further hearing on February 23, 2026.

Counsel for Appellant(s): Advocate V.K. Prasad 

Counsel for Respondent(s): A.S.P. Kurup, Sadchith P. Kurup, Siva Suresh, B. Sreedevi, Athira Vijayan, Vyshnav S. Nair