Brokers seeking a zero-rated GST for insurance to reclaim input tax credit
Insurance brokers are rallying for a 'zero-rate' GST structure to counter the recent loss of input tax credits for the industry. This proposed change aims to alleviate costs for insurers. However, the industry's divided opinions and potential policy hurdles may complicate efforts.
Mumbai: After the insurance industry lost input tax credit benefits from the recent goods and services tax (GST) exemption, the sector's intermediaries are drumming up support for a ‘zero-rate’ tax structure that could ease insurers' costs, stem their own commission cuts as also any looming premium hikes. Yet, the industry is divided on the prospects as the proposal may struggle to take off, given the sweeping policy changes it would entail.
According to four people with knowledge of the matter, the Insurance Brokers’ Association of India (IBAI) is preparing to approach the GST Council and the Central Board of Indirect Taxes and Customs (CBIC) after preliminary discussions with the finance secretary and other officials received a favourable response.
