Insurance Industry Advocates GST Rate Reduction on Premiums with ITC Retention

The insurance industry has urged the government to reduce GST rates on premiums while retaining the Input Tax Credit (ITC) for insurance services. The industry argues that the current GST structure increases the financial burden on policyholders, which could reduce the affordability of insurance products. The proposal suggests that a reduction in the tax rate would make premiums more affordable for customers, thus promoting higher insurance penetration in the country. At the same time, maintaining the ITC would allow insurers to claim back taxes paid on inputs, ensuring smoother financial operations for the companies. The insurance industry hopes the government will take this into consideration to support the growth of the sector.