Kathmandu. The central government in India has indicated that it will not completely remove the Goods and Services Tax (GST) levied on the purchase of life and health insurance policies. According to the news reported by the Indian media citing sources, the Goods and Services Tax Council is considering reducing the tax rate on health and life insurance premiums instead of completely exempting them. A
In India, 18 percent GST is applicable on insurance premiums. The council is studying the possibility of reducing it to 5 percent. It still allows insurers to claim input tax deductions.
The cabinet members reviewing the tax structure have supported the rate cut, but have warned that full exemption from the tax could lead to unnecessary cost increases due to accumulation of unclaimed input taxes.
Opposition leader and West Bengal Chief Minister Mamata Banerjee has called for the abolition of such taxes on insurance premiums, saying that GST has narrowed access to insurance for the common man. Similarly, ruling party leader and minister Nitin Gadkari had also opposed GST on insurance premiums.
According to Financial Express India, the GST Council is expected to meet in April or May to review the report prepared by the Insurance Regulatory and Development Authority of India on tax assessment on insurance premiums.
