Insurers seek GST exemption on insurance premium
Like in all life insurance policies, insurance premium consists of two components namely, amount of service cost and amount invested. GST should be levied on the amount of service cost and not the amount invested as it is refunded to the insured person at the time of maturity. The Government should develop a valuation mechanism wherein GST should be levied on the service part only. This will, in turn, provide impetus to the people in large to buy more life insurance policies as its premium amount will get reduced by the certain amount and thereby improving the insurance business also. A similar view can be taken for Health Insurance policies.