There are increasing demands to bring insurance policies in affordable prices and to remove the Goods and Services Tax (GST). At the same time, the Center hopes to take measures to ensure that everyone gets insurance. As part of this, there are chances of a key decision coming out in the matter of GST on premiums of insurance policies. Central government sources revealed that term insurance policies are likely to be exempted from GST. There are reports that a decision in this direction is likely to be taken in the GST Council meeting to be held on September 9.
However, a top official stated that there is a possibility of continuing GST as is on insurance policies taken for investment. Term insurance is a comprehensive insurance cover. Other policies, however, provide other benefits in addition to insurance coverage. That is why they may not be exempted. If GST is lifted, the central government will get approx. Rs. It seems that there is a possibility of a loss of income of 200 crores. However, policyholders will benefit if GST is lifted on term insurance premiums. It seems that the centre thinks that more people will come forward to take term insurance.
It is known that Union Transport Minister Nitin Gadkari has recently written a letter to Union Finance Minister Nirmala Sitharaman to remove GST on life insurance and health insurance policies. Since then, the discussion on the issue of lifting GST has been going on. In the wake of Gadkari’s letter, demands from the opposition have increased. Currently, 18 percent GST is levied on health insurance and term insurance. However, other insurance plans have different rates. GST has to be paid at the rate of 4.5 per cent on the first year’s premium and 2.25 percent thereafter. However, we have to wait and see what decision the GST Council will take.
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