5% GST rate on insurance premium instead of 18%
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Recently Rates on GST has been revised on some goods and services.. still there is one segment which is not reviewed and unchanged yet. That is 18% tax on Insurance premium.
I am of the view that the rate of GST on any Insurance premium is 18% which is excessively high for the common people of India.
In present Insurance (Health,Life , Vehicle) is like basic need and is no longer a luxury service for middle class people, who take the insurance to secure their future, retired life or family in any miss happening circumstances. People generally pay the premium amount from their savings only by avoiding interest income from savings account. Average return on any insurance policy is around 8% to 9% while the tax collected presently is 18% on the premium on each payment.
Option is proposed that the GST rate on Company, Firm, or HUF can be kept unchanged but for Individual it should be revised from 18% to 5%.
of course the revenue of Government might decrease due to this effect, but at the same time general people will become more enthusiastic to take insurance cover which will be beneficial to insurance industry and our nation at large.
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