The Centre has proposed scrapping the existing 18% GST levied on insurance premiums paid by individuals. The measure is aimed at making insurance products more affordable and boosting penetration.
During the discussions, some states expressed revenue concerns and differing views on the proposal. Questions were also raised over whether the benefit of GST relief on premiums would be passed on to consumers. Telangana Deputy Chief Minister cautioned that such an exemption could result in a revenue loss of around Rs 9,700 crore.
However in a note shared on Thursday, global Emkay noted that the scope of the exemption remains unclear. “Scope of exemption remains unclear From the statements, it is still unclear if the entire Individual Life Insurance basket (including savings and annuity) or just the Retail Term Life that will be exempted from GST,” the brokerage noted.
