Friday, July 7, 2017

Impact of GST on LIC policy holders

If you’re a LIC insurance policy customer, you must read this article carefully. As a policy holder, service tax and other taxes in your policy have been replaced by GST.

So, check out the impact of GST on your policy.

As per official website of LIC, we’re providing the wordings as it is.

We hereunder state the important changes related the GST that will come into force w.e.f. 01.07.2017.

1. Change in the name of Tax
Currently we are charging the Service Tax from the policyholders and showing the Service Tax separately on the premium receipt. Now words “Service Tax” shall be replaced by GST.

2.Tax rates
Tax rate will be changed under GST as under

lic gst

lic gst

3.GST on Interest Charged for Delayed Premium i.e. late fees

GST will be applicable on Interest charged on delayed receipt of premium. Rate will be applicable according to the type of premium collected.

4.CDA Charges

GST will be applicable on CDA Charges including [email protected] 18% rate

5. Following Service tax exemptions to be continued in GST as decided by GST council

i) Services of life insurance business provided by way of annuity under the NPS regulated by PFRDA
ii) Services provided by IRDAI to insurers under IRDAI
iii) Services of life insurance business provided under following schemes
a) Janashree Bima Yojana(JBY)
b) Aam Aadmi Bima Yojana (AABY)
c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand
d) Varishtha Pension Bima Yojana
e) Pradhan Mantri Jeevan Jyoti Bima Yojana
f) Pradhan Mantri Jan Dhan Yojana
g) Pradhan Mantri Vaya Vanadan Yojana
h) Any other insurance scheme of State Government as may be notified by Government of India on recommendation of GSTC

6. GST on charges recovered from policyholders:
a) GST will be applicable on charges paid by policyholders as alteration fee/quotation fee /duplicate policy preparation charges as applicable.
b) GST will be applicable on charges recovered for granting a written acknowledgement for receipt of notice of assignment/ registering cancellation or change of nomination.

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