Impact of GST on Insurance Sector, GST Impact on Insurance Companies
Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms. ||Impact of GST on Insurance Sector, GST Impact on Insurance Companies. Indian tax system is going to be encountered with one of the biggest tax reforms.

Impact of GST on Insurance Sector
Term Plan:
Term plan offers pure risk protection to the nominee of deceased, from death of the insured. Sum assured under term plan protection is paid to the nominee if insured dies under the contracted term period with Insurer. The premium element of the term plan contains majority of the risk cover. As already discussed, existing plans available in the market before July1st, 2017 will attract levy of 15% service tax as against prospective GST rate that will take this up to 18% by trailing increase of 3%.Endowment Plan:
These plans are in orthodox in nature offers both death and maturity benefits, whichever happens first. As per existing laws, endowment plan takes a levy of 3.75% service tax on the premium in the first year of the policy and post GST implementation it will raise to 4.5% in first year. From second year onwards as per existing laws, endowment plans attracts levy of 1.875% service tax and post GST implementation it will raise to 2.25% for second year onwards.ULIP:
ULIP stands for Unit Linked Insurance Plan (ULIPs) they too offer twofold benefits of insurance and investments. As per existing laws, ULIP takes a levy of 3.5% service tax on the protection component of ULIP in the first year of the policy and post GST implementation it will raise to 4.5% in first year. From second year onwards as per existing laws, ULIP attracts levy of 1.75% service tax and post GST implementation it will raise to 2.25% from second year onwards. Health, Motor & Other Insurance: At present existing service tax is 15%, post GST implementation it will raise to 18%, in turn increasing the cost of insurance.Below is the list of Service Tax Exemptions to be continued in GST as concluded by GST Council
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Services of general insurance business provided under following schemes –
- (a) Hut Insurance Scheme;
- (b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development Programme);
- (c) Scheme for Insurance of Tribals;
- (d) Janata Personal Accident Policy and Gramin Accident Policy;
- (e) Group Personal Accident Policy for Self-Employed Women;
- (f) Agricultural Pumpset and Failed Well Insurance;
- (g) Premia collected on export credit insurance;
- (h) Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, approved by the Government of India and implemented by the Ministry of Agriculture;
- (i) Jan Arogya Bima Policy;
- (j) National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);
- (k) Pilot Scheme on Seed Crop Insurance;
- (l) Central Sector Scheme on Cattle Insurance;
- (m) Universal Health Insurance Scheme;
- (n) Rashtriya Swasthya Bima Yojana; or
- (o) Coconut Palm Insurance Scheme;
- (p) Pradhan Mantri Suraksha BimaYojna;
- (q) Niramaya Health Insurance Scheme implemented by Trust constituted under the provisions of the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or
- (r) Any other insurance scheme of the State Government as may be notified by Government of India on the recommendation of GSTC.
Services of life insurance business provided under following schemes –
- (a) Janashree Bima Yojana (JBY); or
- (b) Aam Aadmi Bima Yojana (AABY);
- (c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand rupees;
- (d) Varishtha Pension BimaYojana;
- (e) Pradhan Mantri Jeevan Jyoti BimaYojana;
- (f) Pradhan Mantri Jan Dhan Yojana;
- (g) Pradhan Mantri Vaya Vandan Yojana; and
- (h) Any other insurance scheme of the State Government as may be notified by Government of India on the recommendation of GSTC.