- IRDAI is consulting with the insurance industry to determine the best GST rate for passing on tax benefits to policyholders
- Life and health insurance sectors will provide their input through the Life Insurance Council and the General Insurance Council respectively
- These councils will gather industry recommendations and submit them to IRDAI which will then present a consolidated view to the Ministry of Finance
- The current GST rate on health insurance premiums is 18% but there is a push to reduce it to 12% with full Input Tax Credit benefits
- Some insurers are advocating for a GST rate of nil or 5% for senior citizens and policies with coverage up to 5 lakh rupees with full ITC benefits
- Health insurers report operational costs of 6 rupees per 100 rupees of premium earned
- Life insurers are also seeking a reduction in GST to 0% or 5% with complete ITC benefits
- The 55th GST Council meeting postponed the decision on reducing GST on insurance premiums and will reconsider after feedback from IRDAI
- Finance Minister Nirmala Sitharaman mentioned that the Group of Ministers will revisit the issue post feedback from the insurance regulator
Source: a2ztaxcorp.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
