The Indian government has introduced two significant changes related to Goods and Services Tax (GST) that are expected to benefit taxpayers and policyholders. South Indian Bank has launched a UPI-based GST payment service, allowing taxpayers to pay their GST using the Unified Payments Interface (UPI). This service enables taxpayers to make secure and effortless payments from anywhere, either by scanning a QR code or inputting a Virtual Payment Address (VPA).
The bank, which is approved by the Reserve Bank of India (RBI) as an Agency Bank, was previously accepting GST payments through internet banking and at bank branches. The introduction of UPI-based payments is expected to make it easier for taxpayers to pay their GST, and the bank’s Head of Branch Banking, Biji SS, stated that UPI is the most preferred mode of payment today.
In addition to the new payment service, insurers are also working on methods to pass on the benefit of the recent GST cut on life and health insurance policies. The GST on premiums for individual life and health insurance policies has been reduced to zero, which means that insurers can no longer avail input tax credit. Insurers will need to adjust their pricing to align with the absence of input tax credit, and it is expected that the benefit of the GST cut will be passed on to consumers, although the extent of the benefit is still to be determined.
Edme Insurance Brokers Ltd. commented that the reduction of GST on premiums will likely lead to more people buying health and life insurance cover. The company’s Chief Human Resources Officer, Jonika Jain, stated that the GST cut will depend on how insurers adjust their pricing, and the entire benefit may not be passed on to consumers. However, the company is planning to expand its operations, including doubling its workforce to 1,000 in five years, and is also planning expansion in the UAE, UK, and Singapore.
Overall, these developments highlight the impact of the GST changes on businesses and consumers. The UPI facility from South Indian Bank provides easier tax payment options, while the GST reductions are expected to lead to increased demand for health and life insurance cover. As the insurance industry adjusts to the new GST rates, consumers can expect to see changes in pricing and potentially more affordable insurance options.