insurance policy: Relief from GST on life and health insurance premiums can be found soon. The meeting of Ministers (GOM) on insurance is expected to be held in April. In this, the Group of Ministers will finalize its recommendations to the GST Council. It is expected that the council will consider this proposal in its meeting in May. IRDAI has already given its opinion in this regard. A senior government official gave this information.
IRDAI gave its opinion on this issue
The official told Moneycontrol, “IRDAI has given its opinion on GST relief on life and health insurance. The GOM meeting on insurance may be held in April. In this, he can finalize his recommendations to the GST Council. Then the GST council can decide to give relief in the late April or May meeting.” He said that the state governments are ready to provide relief to the insurance sector in GST. But the reason for no decision on this is that IRDAI did not give its opinion.
No decision could be taken in GST Council meeting on 21 December
The official said that IRDAI participation in this case is necessary. If this had happened, it could have been alleged that the opinion of the insurance regulator in this case was not taken into consideration. The final decision in this regard will be taken in a meeting of the Minister under the chairmanship of Bihar Deputy Chief Minister Emperor Chaudhary. Earlier, the Group of Ministers will consider the comments of the insurance regulator. Earlier, the issue was postponed in the GST Council meeting on 21 December.
Life insurance companies do not want discounts on term insurance
The cabinet has 13 members. These include Uttar Pradesh Finance Minister Suresh Kumar Khanna, West Bengal Finance Minister Chandima Bhattacharya and Kerala Finance Minister KN Balgopal. Currently 18% GST is imposed on life and health insurance premiums. Life insurance companies have opposed the abolition of GST on term life insurance premiums. They believe that this will stop the path of input tax credit, which will increase the cost of policyholders.
Life insurance companies are opposing this exemption
Currently, insurance companies adjust taxes paid on commercial expenses such as IT infrastructure, marketing and administrative costs against taxes collected from policyholders. If the term insurance premium is exempted from GST, insurance companies will not be able to claim ITC. This will increase the cost of their business. They will eventually put this burden on policyholders. Due to this, policy holders will not be able to avail GST exemption on life insurance premium.
