Excelsior Correspondent
JAMMU, Aug 5: Northern Insurance Employees’ Association (Sgr Div) has strongly opposed the GST on the insurance premium by the Modi Government.
A meeting of employees of LIC of India under the banner of Northern Insurance Employees’ Association Srinagar Division representing employees of Jammu& Kashmir was held at Jammu today in which a large number of employees from Jammu, RS Pura, Samba, Udhampur and Kathua were present.
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Speaking on the occasion, Pawan Gupta, Divisional secretary Northern Zone Insurance Employees’ Association Srinagar Division, said the Government of India has rolled out Goods and Service Tax (GST) Bill from July 2017. The GST on essential items like food grains, pulses, vegetables and milk has been fixed as zero. This is a good gesture of the Government after food, clothing and shelter, insurance protection is an important need of the people. As such, the Government should encourage savings through insurance schemes by giving tax incentives. This will help in greater insurance penetration in the country as insurable population will get attracted to purchase insurance policies. It will not only provide the necessary financial security to the policy holder’s family in case of his untimely death but also help the Government in investing the long term savings of the people for nation building activities.
But the people in general and those in Insurance sector are disappointed to know that the GST on Term Insurance, Health and ULIP policies have been fixed at 18%. The GST on new business premium including single premium of life and pension products have been fixed at 4.5% while GST of 2.25% is fixed for renewal premiums and 1.8% for single premium annuities. All this burden of tax will be borne by the policy holders of LIC and other insurance companies.
It is most unfair to impose tax on a person (policy holder) when he tries to save little amount for security of his family. It means, it is a tax on the risk of life which is being covered by a life insurance policy. Imposing GST on life insurance products and premiums will be burdensome and also a huge disincentive for savings. It will be an impediment for the growth of the insurance industry.
“We, the insurance employees oppose this move of the Govt and fervently appeal to remove GST on life insurance products/premium and encourage people to save through life insurance,” he added.
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