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Insurers will no longer be able to claim input tax credit (ITC) on Goods and Services Tax (GST) paid on commissions and brokerage for individual health and life insurance policies from September 22, the Central Board of Indirect Taxes and Customs (CBIC) clarified on Tuesday.
The life insurance industry is preparing to approach the government with fresh demands after the GST Council exempted individual life and health insurance policies from tax earlier this month.
The reduction in health insurance premiums is unlikely to match the 18% GST cut as insurers are expected to pass some of the costs arising from input taxes to customers.
The Centre has proposed exempting life and health insurance premium from GST, Bihar Deputy Chief Minister and convenor of insurance GoM Samrat Choudhary said on Wednesday.
Life Insurance Corporation of India (LIC) announced on Monday that it has received a demand notice of approximately Rs 57.2 crore from the tax authorities for excess Input Tax Credit (ITC) availed during the financial year 2020-21. The communication, issued by the Assistant Commissioner in Delhi, addresses the alleged excess ITC claimed by the company.
The Insurance Regulatory and Development Authority of India (IRDAI) is holding talks with the insurance industry to determine the optimal Goods and Services Tax (GST) rate that would allow companies to pass on tax benefits to policyholders, sources told CNBC-TV18.
The GST Council on December 21 again deferred a decision to exempt and cut taxes on health and life insurance premiums. The reason for this is that the ministers’ panel needs more time to reach a consensus on the matter.
Finance Minister Nirmala Sitharaman on Monday said the cost of insurance to the policy holder is expected to come down if the GST Council recommends a reduction in GST rate on health and life insurance policies.
The revenue collected by the union government through Goods and Services Tax (GST) on healthcare and life insurance services surged by 680 per cent to Rs 16,398 crore in 2023-24 from Rs 2,101 crore in 2019-20, Minister of State for Finance Pankaj Chaudhary said in a written reply in Lok Sabha on Monday.
Thinking of buying or renewing your life insurance and health insurance? Well, the government could soon be giving you a tax breather. Come December, sources say that the GST Council is likely to meet and consider the report on the proposal to rationalise rates on life and health insurance premium.