From July 1st, buying an insurance cover will become expensive with the decided GST rates, service tax on insurance sector is about 15 per cent including cess now but it'll change to 18 per cent under the GST regime.
According to the Gopal Balachandran, Chief Financial Officer, ICICI Lombard, "The GST rate for insurance, clubbed with financial services has been announced at 18 per cent. This will increase the incidence of tax for customers from the existing 15% to 18 per cent,"
He further added, "the industry has also been seeking removal of exemption and the details in terms of announcement of the exemption list is awaited"
Senior Executive Director of Star Health and Allied Insurance, S Prakash said, "An attractive GST would have further influenced insurance penetration but the industry is still geared up to take the growth further with rising in life expectancy, per capita income, financial literacy and medical advancement in India,"
PwC India's Joydeep K Roy said, "considering the low penetration of insurance in India, micro insurance (by regulator definition) or certain instances below a threshold need to be exempt from GST."
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