The meeting of the 54th Goods and Services Tax (GST) Council prescribed for September 9, 2024 in New Delhi, according to several media reports, can discuss the possibility of removing 18 percent GST on Term Life Insurance Premium. Various stakeholders of the insurance sector have long advocated this expulsion.
Industry experts believe that implementing this decision, ie, ending this tax, will significantly reduce the financial burden on insurance customers. 18 percent of GST on life and health insurance premiums has been controversial for a long time, emphasis has been laid to remove many stakeholders.
“Many stakeholders, including sitting ministers, have requested exemption to GST on term and health insurance. There is a possibility, GST Council can consider the demand of this industry favorably, especially if the loss of revenue is not prominent due to grant of such exemption. However, to allow the complete impact of exemption from GST, insurance companies will also require permission. BDO India.
Currently, the term life engines 18 percent of GST on insurance premium to the cost of insurance.
“Term Life Insurance is essentially an insurance that acts as a security to guarantee that families are preserved in the case of the death of the policy holder. Whenever the government enforces such high taxation rates on such a premium, it prevents individuals from taking risk for this necessary shield. GST can increase the purchase of GST. Private Limited Ki.
Why should GST be removed from insurance products?
Sandeep Pareek has been highlighted that exempting GST from term insurance products can promote these schemes a lot by making these schemes more economical to the public.
Siddharth Maurya said, “Lowering or removing GST on term insurance premium can encourage more people to secure the promise of their families without additional financial burden. This will also expand the insurance coverage base, promoting the development of the industry.”
Maurya also believes that such a decision can change the insurance sector of India. “This will demonstrate the commitment of the regulator to make life insurance more accessible and effective as a risk management tool. We hope that the GST Council will adopt a forward thinking approach that benefits millions of Indians.”
Trinumool Congress (TMC) leader and Rajya Sabha MP Derek O’Brien urged Finance Minister Nirmala Sitarman to abolish GST on health and life insurance premiums. In a letter on 24 August, O’Brien said, “18% GST on health and life insurance premiums has an inappropriate tension on many, which affects his reach to significant financial security in the time of illness, accidents or untimely death. Our shared responsibility is to ensure that this significant security trap is cheaper to all segments of society.”
The GST Council, including the Union Finance Minister and representatives of all states and center regions, was designed to oversee decisions on various GST matters, such as tax rates, discounts and administrative procedures. It plays an important role in shaping India’s GST structure.
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