IRDAI seeks GST rate cut on life and health insurance premiums

The Insurance Regulatory and Development Authority of India (IRDAI) has requested the Finance Ministry to implement a GST rate cut on life and health insurance premiums. This request has been made with the agenda that a rate cut will encourage the purchase of insurance plans, especially as life and health are in jeopardy due to the pandemic. The IRDAI chairman, in a statement said that they have suggested a rate cut as digital mediums have made it easy for purchasing insurance but the high GST rate of 18% tends to discourage the purchase. A lower GST rate of 5% will encourage more customers to secure their families with insurance. This is not the first time that the IRDAI has approached the finance ministry seeking a rate cut. They had earlier asked that the rate be cut down to 12%. The 42nd GST council is scheduled for the first week of October 2020 and a discussion around the proposal made by the IRDAI could be one of the points of agenda.