The Goods and Services Tax has successfully brought several types of tax under the same umbrella. As a result, several indirect taxes are now streamlined.
The most ambitious tax reform of the country has been successful in not only bringing down the effective tax rates on a lot of good but also has managed to simplify the taxation. Before the introduction of GST, a host of indirect taxes was in place, and each one of them had a cascading effect.
The implementation of GST has resulted in a hike in the financial services tax. While the taxes were at 15% before GST, now they stand at 18%.
Considering the fact that India has one of the lowest insurance penetrations in Asia, this increase in price might drive some people away. Insurers are urging the government to bring down the tax rates to single digits for essential products such as pure life protection and health insurance.
Insurers also claim that the implementation of new tax reform has also resulted in the costs of a lot of products. Reducing the tax rates would allow insurers to reach out to more people and help with country’s capital in the long term.