Insurers advocate for reduction in GST on LI product

Mumbai, Jan 16  Life insurers in the country are of the view that a financial product as critical as life insurance should have a reduced GST.

Moreover, the life insurers are also batting for getting exemption on stamp duty for mandated products.

The idea is to ensure that the costs are not increased for the end customer.

"A financial product as critical as life insurance should have a reduced GST, and get exemption on stamp duty for mandated products, so that the costs are not increased for the end customer," says Tarun Chugh, MD & CEO, Bajaj Allianz Life on budget expectations.

Life insurers also want receipt of life insurance premia through the NRE account of an NRI as export service for GST reduction purpose.

The government can clarify that the receipt of life insurance premium through the NRE account of an NRI, in Indian rupees, is permitted and qualifies as export of services for GST purposes. This will help save costs for NRIs, and in turn, boost the life insurance business, Deloitte said in a statement.

Life insurers are also looking at increasing tax exemption limit for the industry.

With the increased risk perception amongst customers converting to more people buying term plans, it would be an ideal time for the Government to consider increasing the tax exemption limit for life insurance, or have a separate section for deduction of life insurance premiums, Chugh said.

Further the deduction for life insurance premiums should be available to all taxpayers, irrespective of the taxation regime opted by them. Considering the growing numbers, this would surely be a welcome change for tax payers, and the industry alike, he added.