At the stroke of midnight on July 1, 2017, the most anticipated and a highly debated Goods and Services Tax (GST) was launched in India.
The central tax reform witnessed a lot of fanfare and was also boycotted by certain stakeholders, especially within the political circle. However, businesses and end consumers were the most involved. From now on, all types of indirect taxes such as service tax, excise duty, sales tax along with other local and state taxes will merge into one single tax called GST.
With the introduction of GST, taxation procedure is expected to be much simpler and easier to understand. GST is going to be a ground-breaking movement in Indian indirect tax structure. The existing tax mechanism between the state and the centre will go through a complete overhaul with the implementation of GST.
Being a value-added tax, GST aims to do away with the cascading effect on goods and services cost. GST has paved the way for total refurbishment of existing tax architecture in India as it is going to impact incidence, structure and computation of indirect taxes. Currently, 15% service tax is levied on services which comprises of 14% basic service tax, 0.5% Swachh Bharat and 0.5% Krishi Kalyan Cess. With the implementation of GST, consumers have to pay just one single tax.
The GST Council is entitled to ascertain the rate of GST in various services and products. With the country ushering in a new tax regime with the introduction of the Goods and Services Tax (GST), consumers will now have to pay more for banking services, insurance premium payments and credit card bills beginning July 1. Most of the financial services will attract a higher tax of 18 per cent as against the previous 15 per cent under the new indirect tax regime.
The Indian insurance industry will face a temporary brunt as GST implementation will certainly impact insurers as well as individual policyholders. Typically, a policyholder pays a service tax on the risk element of the premium component while the investment element is usually out of the service tax scope.
This story is from the August 2017 edition of THE INSURANCE TIMES.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 2017 edition of THE INSURANCE TIMES.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Interview: Johnson Varughese Chief Executive Officer WALAA Insurance Company Al-Khobar, Kingdom of Saudi Arabia
\"Establishment of the IA will accelerate the growth of the Insurance Sector as the Industry will now get focused attention. The strategy of IA is likely to be aligned with Vision 2030 and Financial Sector Development plan. Since savings is one of the pillars of Vision 2030, I hope to see a lot of emphasis on Protection and Savings Insurance Products.\"
IRDAI Corner
Investments in Infrastructure Debt Funds - NBFC
2023 was a watershed year for insurance sector, but there's more to come
Innovation in regulatory framework, promotion of ease of doing business while enhancing protection of policyholders’ interests and measures taken to expand the reach of insurance penetration make 2023 a year to remember in the insurance industry.
The Future of Insurance: ESG as a Cornerstone of Sustainable Underwriting
As climate change, social inequality, and governance issues become increasingly prominent, insurers are recognizing the need to integrate Environmental, Social, and Governance ESG) factors into their underwriting processes. This shift not only aligns with global efforts to address pressing issues but also positions the insurance industry as a key player in promoting sustainability and a fraternity who is concerned about their ESG goals.
Cancer Insurance - An Indispensible cover
Recent advances in cancer treatment have opened new treatment options, such as targeted therapy and immunotherapy, for people diagnosed with advanced-stage disease. However, these advanced treatments are costly and remain out of reach of many.
Emerging Horizons: New Opportunities in Commercial General Insurance Segment
The Indian economy continues to be a beacon of growth and opportunity, attracting both domestic and foreign investments across various sectors. The country's economic reforms and ease of doing business initiatives have further improved the investment climate, fostering entrepreneurial spirit and innovation.
Interview: Dr Tarun Agarwal Director National Insurance Academy, Pune
\"National Insurance Academy is undoubtedly the most renowned institution not just in India, but internationally. We are an apex institution in the field of education, training, research and consultancy in insurance, pension and allied areas.\"
Historical Maritime Fraud
M.V B-Atlantic - War Risk Cover: An Insurer’s Dilemma or Fraud!!
Navigating the natural conundrum: Why Reinsurers continue to maintain positive outlook for non life Insurance market in asia pacific region in 2024 & beyond despite challenges posed by natural hazards
The Asia-Pacific region has long been susceptible to a range of natural hazards, including earthquakes, typhoons, floods, and tsunamis. These events pose significant challenges to the insurance industry, particularly the non-life insurance sector, which covers property, casualty, and other general insurance lines.
Trust with Law
Khaitan Legal Associates' website succinctly proclaims, \"We are a value-driven law firm.