Insurance execs knock on FinMin door for ITC fix

Insurance companies' chief executives sought some leeway from the Finance Ministry on Wednesday to make an allowance for input tax credits on individual health and life insurance policies, whose Goods and Services Tax (GST) levy has been slashed to zero by the GST Council, effective from September 22.

- AATHIRA VARIER

The insurers' parleys with the Finance Ministry highlighted that denial of input tax credit (ITC), for instance, on commissions paid to agents that are subject to 18 per cent GST, puts them in a difficult position to carry out the expected reduction in insurance premium rates.

The insurance industry chiefs had also sent a missive to finance ministry officials last Friday, suggesting that the implementation of the new GST rates be done on a prospective basis, while allowing for ITC on renewal premiums paid on existing policies.

They had also requested for inclusion of commission expenses in GST exemption, just as it had been done for reinsurance of individual policies, and refund of insurers' unutilised ITC GST credits, sources aware of the development said.