A month on, GST 2.0 positive for customers, insurers face teething issues

Sales and inquiries see a spike, even as insurers plan to use multiple levers, including renegotiating commissions with distributors, to reduce the impact of withdrawal of input tax credit (ITC)

Sales of, and inquiries for, life and health insurance policies have seen a surge over the past month, reflecting the effect of implementation of zero GST on premiums as insurers have passed on the full benefit to customers. However, back-end challenges remain, particularly around managing the impact of the withdrawal of input tax credit (ITC). Insurers have indicated that they will pass on some of this impact to distributors and adjust their product mix to mitigate the effect, though margins are expected to take a hit in the short term.

 

In early September, the GST Council announced a complete tax