Authorities-sponsored crop insurance coverage schemes comparable to Pradhan Mantri Fasal Bima Yojana and Restructured Climate-Based mostly Crop Insurance coverage Scheme, that are additionally backed by authorities subsidies, are exempt from this levy.
“Protecting in view the general goal of ‘Insurance coverage for All by 2047’, in addition to the affordability stage and buying energy of the agricultural inhabitants, it might be fascinating to increase related help to all rural-centric and parametric merchandise masking agri and allied dangers,” Lavanya Mundayur, chairman and managing director of public sector agency Agriculture Insurance coverage Firm Ltd, instructed ET.
The GST Council, in its assembly in December 2024, deferred a choice on decreasing taxes on well being and life insurance coverage.
A gaggle of ministers, mandated by the GST Council to look into taxation of insurance coverage, has advisable eradicating the GST on insurance coverage premiums paid for time period life insurance coverage insurance policies and premiums paid by senior residents in the direction of medical health insurance.
Nevertheless, it proposed that 18% GST proceed to be levied on premiums paid for insurance policies with medical health insurance cowl of greater than ₹5 lakh. The following GST Council assembly is but to be scheduled.
India’s general insurance coverage penetration dropped to 4% in 2022-23 from 4.2% in 2021-22, as per the newest obtainable knowledge. Over this era, life insurance coverage penetration fell to three% from 3.2%. The non-life insurance coverage sector remained unchanged at 1%.
Mundayur mentioned that with a purpose to additional drive insurance coverage penetration within the agricultural and rural section, a primary commonplace vanilla cowl, linked to crop yields, will be developed and, relying on geography and different state and central authorities subsidies, additional add-ons will be integrated.
She mentioned the insurer is within the means of partnering with banks, microfinance establishments, agri-techs and enter suppliers for creating bundled insurance coverage merchandise for agriculture and allied actions. One of many focus areas for AIC is parametric insurance coverage, which holds immense potential in addressing climate-induced agricultural dangers in a quicker, extra clear and cost-effective method, she added.