The Life Insurance Council will propose a zero rate structure with respect to the Goods and Services Tax (GST) for insurance policies to the GST Council. The insurance industry has been asked to levy 18% rate under GST to the end consumers.
The industry had proposed a 0% GST which is the lowest tax bracket but the GST council ignored it completely. As of now, the customers who buy insurance policies have to pay a 15% Service Tax including cess. The insurance industry was expecting this to be now revised to 5% rate structure under GST.
There is a fear among the insurance companies that a high tax slab will impact the business significantly in the near term. And hence the life insurance council is again making a presentation to the Council to get a lower tax rate.
