Life Insurance Council, a forum for stakeholders in the sector, has requested the GST Council and the finance ministry to reduce GST on agents’ commissions from 18% to zero. The request comes after GST on premiums and reinsurance were brought down to zero.The council feels that if agents’ commissions continue to attract 18% GST, life insurance companies would lose out on a significant amount of input tax credit (ITC), which would impact the bottom line of these firms. Kamlesh Rao, chairperson of Insurance Awareness Committee (IAC-Life) of the council, said it would send its representation in this regard.
Earlier, the council had sought a cut in GST on reinsurance and agents’ commissions, along with on premiums, primarily in protection products, such as term insurance. The GST Council, however, has reduced GST on savings products, such as unit-linked insurance plans (ULIPs) and endowment policies, along with term policies for individuals. GST on group insurance was not reduced. According to Rao, the GST cut would benefit term policies the most as these policies earlier attracted 18% GST. In savings-oriented products, GST was already low. Ra added that he was optimistic of term products expanding following the GST cut.
