Exempt life insurance from GST to enable insurers to claim ITC benefits: LIC MD

Mumbai, Nov 17 (PTI) LIC Managing Director Ratnakar Patnaik on Monday pitched for exempting life insurance sector from Goods and Services Tax as it would help insurers claim input tax credit.

Patnaik also welcomed the government's decision to eliminate the Goods and Services Tax (GST) on all individual life and health insurance premiums, effective September 22, 2025.

"My small request will be...it is zero taxation. Can it be GST exempt? That will help us to have some input tax credit (ITC) in place," Patnaik said, while speaking at CII Financing Summit here.

In August, the GST Council resolved to cut GST to zero without putting it under the GST exempt category. Under the latter, companies like LIC can benefit by way of saving on operational costs through benefits on the ITC front.

Patnaik also appealed policymakers to consider excess holdings of government securities and state development loans as infrastructure and housing investments, pointing out that governments deploy the funds for the same purpose.

At present, insurance companies have been able to take their investments in housing and infrastructure to just over 9 per cent as against the 15 per cent mandate, he said.

He also appealed to the government for a review into the three-year-old policy of taxing maturity proceeds for policies with premium of over Rs 5 lakh.

"Is it time to upgrade or revise upwards to up to Rs 10 lakh, the maturity proceeds should be tax free, so that we can get some good policies and mop up good funds," he said.

He affirmed LIC's support for investing in developmental purposes for the country through investments in corporate bonds and government securities.

Meanwhile, speaking at the same event, NSE's managing director and chief executive Ashishkumar Chauhan said the rules governing foreign portfolio investors (FPIs) have become too tough over the years and India is making such investors uncomfortable with the amount of information being sought.

"The amount of information we ask for is very very intrusive. Many of them do not want to give that information. And so, they are staying away," Chauhan said.

He also said that "we need to standardize the way to look at market volumes, and shirk the tendency to present data in such a way that India is seen as the largest or biggest." "We think we are the largest market in derivatives, (but) we are by far not," he said, adding that on premium terms, trading on stock options in the US alone is five-times more than India every month and sometimes the single scrip of Tesla does more.

"Once we have the right statistics, we will have the right policy coming out," he said. PTI AA ANU ANU