banner

FAQ's - Goods and Services Tax

Learn about the impact of GST on Insurance

#Life-Insurance
6:52 min read

Starting 1st July 2017 Goods and Services Tax (GST) is proposed to replace indirect taxes like Service Tax (ST) and Cess. The introduction of the GST by the Government will help transform the economy, bring in transparency and is a significant step toward the concept of “One Nation, One Tax”.

Details of GST rates that will be applicable are mentioned below:

Type of Product Current ST rates Proposed GST rates
Endowment - First Year 3.75% 4.50%
Endowment - Second Year 1.88% 2.25%
Single-Premium Annuity Products 1.50% 1.80%
Term Plan/Rider/Health 15.00% 18.00%
Charges on ULIP 15.00% 18.00%

List of Provisional GST ID`s of Max Life Insurance along with the registered office address

1. What is GST (Goods and Services Tax)?

GST stands for Goods and Services Tax which is a destination-based tax, levied at a single point at the time of consumption of goods or services by the consumer. GST is based on the principle of value-added tax.

2. What are the types of GST?

GST is composed of three types of taxes. All transactions of goods and services made within a State would attract two levies i.e. CGST & SGST and in cases of interstate transactions, IGST will be applicable:

a. CGST (Central Goods and Services Tax): paid on all transactions within a State, collected by the Central Government
 

b. SGST (State Goods and Services Tax):, paid on all transactions within a State, collected by the respective States Government
 

c. IGST (Integrated Goods and Services Tax): paid on all inter-state transactions, or import of goods into India, collected by the Central Government

 

 

 

What will be the applicable rate on my Max Life Insurance Policy?

Name of the Product Term Current ST Proposed GST
Max Life Forever Young Pension Plan ULIP 15% 18%
Max Life Guaranteed Income Plan Endowment 1.88% 2.25%
Max Life 10 Year Term Rider Rider 15% 18%
Max Life 20 year Endowment Participating Insurance Endowment 1.88% 2.25%
Max Life 5 year Term Rider Rider 15% 18%
Max Life Accident Death & Disability Rider Rider 15% 18%
Max Life Accidental Death and Dismemberment Rider Rider 15% 18%
Max Life Amsure Bonus Builder Endowment 1.88% 2.25%
Max Life Amsure Business Builder Endowment 1.88% 2.25%
Max Life Amsure Future Builder Endowment 1.88% 2.25%
Max Life Amsure Magic Builder ULIP 15% 18%
Max Life Amsure Secure Returns Builder ULIP 15% 18%
Max Life Cancer Insurance Plan Term 15% 18%
Max Life Capital Builder ULIP 15% 18%
Max Life Children's Endowment Participating Insurance to age 18/24 with whole life option Endowment 1.88% 2.25%
Max Life College Plan Endowment 1.88% 2.25%
Max Life Comprehensive Accident Death Benefit Rider Rider 15% 18%
Max Life Dread Disease Rider Rider 15% 18%
Max Life Easy Life Retirement Plan Regular Premium/Single Premium (Participating) Policy Endowment 1.88% 2.25%
Max Life Easy Term Policy Term 15% 18%
Max Life Endowment to age 60 Participating Insurance Endowment 1.88% 2.25%
Max Life Endowment Waiver of Premium Rider Rider 15% 18%
Max Life Fast Track ULIP 15% 18%
Max Life Fast Track Super ULIP 15% 18%
Max Life Five Year Renewable and Convertible Term Insurance (Non-Participating) Rider Rider 15% 18%
Max Life Five Year Renewal & Convertible Term Insurance (Non Participating) Term 15% 18%
Max Life Flexi Fortune ULIP 15% 18%
Max Life Fortune Builder ULIP 15% 18%
Max Life Future Genius Education Plan Endowment 1.88% 2.25%
Max Life Future Secure Endowment 1.88% 2.25%
Max Life Future Secure II Endowment 1.88% 2.25%
Max Life Guaranteed Income Plan Endowment 1.88% 2.25%
Max Life Guaranteed Insurability Option Rider Rider 15% 18%
Max Life Guaranteed Lifetime Income Plan Endowment 1.88% 2.25%
Max Life Guaranteed Monthly Income Plan Endowment 1.88% 2.25%
Max Life Immediate Annuity Endowment 1.88% 2.25%
Max Life Level Term Policy (Non-Participating/Non-Convertible) Term 15% 18%
Max Life Life Gain Endowment (Participating Plan) Endowment 1.88% 2.25%
Max Life Life Gain Plus 20 Participating Plan Endowment 1.88% 2.25%
Max Life Life Gain Plus 25 Participating Plan Endowment 1.88% 2.25%
Max Life Life Gain Premier Endowment 1.88% 2.25%
Max Life Life Invest Plan ULIP 15% 18%
Max Life- Life Line Healthy Family Health 15% 18%
Max Life Life Maker Gold ULIP 15% 18%
Max Life Life Maker Pension Plan ULIP 15% 18%
Max Life Life Maker Platinum ULIP 15% 18%
Max Life Life Maker Premium Investment plan ULIP 15% 18%
Max Life Life Maker Unit Linked Investment plan ULIP 15% 18%
Max Life Life Partner Plus Limited Pay Endowment to age 75 Endowment 1.88% 2.25%
Max Life Life Pay Money Back (Participating Plan) Endowment 1.88% 2.25%
Max Life Life Perfect Partner Super Endowment 1.88% 2.25%
Max Life Life Shield Term 15% 18%
Max Life LifeLine SafetyNet Plan Health 15% 18%
Max Life LifeLine Wellness Plan Health 15% 18%
Max Life LifeLine Wellness Plus Plan Health 15% 18%
Max Life Max Bhavishya Term 15% 18%
Max Life Max Mangal Endowment Plan Endowment 1.88% 2.25%
Max Life Max Vijay Endowment 1.88% 2.25%
Max Life Max Vriksha Money Back Plan Endowment 1.88% 2.25%
Max Life MAXIS ULIP 15% 18%
Max Life MAXIS Super ULIP 15% 18%
Max Life Medi Cash Plan Health 15% 18%
Max Life Medi Cash Plus Plan Health 15% 18%
Max Life Monthly Income Advantage Plan Endowment 1.88% 2.25%
Max Life Online Term Plan Term 15% 18%
Max Life Online Term Plan Plus Term 15% 18%
Max Life Option to Participate in Progressive Bonus Rider 15% 18%
Max Life Partner Care Rider Rider 15% 18%
Max Life Payor Rider Rider 15% 18%
Max Life Personal Accident Benefit Rider Rider 15% 18%
Max Life Platinum Protect II Term 15% 18%
Max Life Platinum Protect Term 15% 18%
Max Life Platinum Wealth Plan ULIP 15% 18%
Max Life Pradhan Mantri Jeevan Jyoti Bima Yojana Term 15% 18%
Max Life Premium Return Term Plan Term 15% 18%
Max Life Premum Return Protection Plan Term 15% 18%
Max Life Secure Dreams ULIP 15% 18%
Max Life Shiksha Plus II ULIP 15% 18%
Max Life Shiksha Plus Super ULIP 15% 18%
Max Life Shiksha Plus ULIP 15% 18%
Max Life Shubh Invest ULIP 15% 18%
Max Life Smart Assure ULIP 15% 18%
Max Life Smart Bond Endowment 1.88% 2.25%
Max Life SMART Invest Pension ULIP 15% 18%
Max Life Smart Invest Pension Plus ULIP 15% 18%
Max Life Smart Invest Pension Super ULIP 15% 18%
Max Life SMART Steps ULIP 15% 18%
Max Life SMART Steps Plus ULIP 15% 18%
Max Life SMART Steps Single Premium ULIP 15% 18%
Max Life SMART Xpress ULIP 15% 18%
Max Life Spouse Rider Rider 15% 18%
Max Life Stepping Stones Participating Insurance Plan Endowment 1.88% 2.25%
Max Life Super Saver Bond Endowment 1.88% 2.25%
Max Life Super Term Plan Term 15% 18%
Max Life Term Plus Rider Rider 15% 18%
Max Life Term Rider Rider 15% 18%
Max Life Term to age 60 Rider Rider 15% 18%
Max Life Term Waiver of Premium Rider Rider 15% 18%
Max Life Top Gear ULIP 15% 18%
Max Life Unit Builder ULIP 15% 18%
Max Life Unit Builder Plus ULIP 15% 18%
Max Life Unit Linked Group Gratuity Plan ULIP 15% 18%
Max Life Unit Linked Group Superannuation Plan ULIP 15% 18%
Max Life Waiver of Premium Plus Rider Rider 15% 18%
Max Life Waiver of premium Rider Rider 15% 18%
Max Life Waiver of premium Rider for (WLP) Rider 15% 18%
Max Life Whole Life Non Participating Insurance Endowment 1.88% 2.25%
Max Life Whole Life Participating Insurance Endowment 1.88% 2.25%
Max Life Whole Life Super Plan Endowment 1.88% 2.25%

 

When will the GST be applicable from?

GST is proposed to be implemented from July 1, 2017.

Will GST be paid in addition to the existing taxes?

No. GST is an indirect tax that replaces the current service tax & cesses on premiums. Therefore, only GST will be applicable post 1st July, along with the premium amount.

If the premium is paid before 1st July 2017, will GST still be applicable?

If you pay your due premium for a policy on or before June 30, 2017, Service Tax will be applicable at the prevailing rate. In case of an advance payment of premium for policies due after 30th June 2017, GST will be applicable hence differential unpaid amount arises on account of GST if any, will have to be paid by the customer.

How do I know the revised premium and applicable GST on my policy?

You will receive the communication regarding applicable GST rates & revised premium of your policy through SMS & emails on your registered mobile number and email ID. Alternatively, you can also view your revised premium with applicable GST while making an online payment after 1st Jul 2017.

Is GST refundable at the time for maturity, death or surrender of the policy?

No, GST will not be refundable at the time of maturity, death or surrender.

Can I pay GST directly to the government, like income tax?

Income Tax is a direct tax wherein Assessee himself is liable to discharge the liability. However, GST is an Indirect Tax which is payable by the person/organization providing the services. Therefore, Max Life will collect GST from you and will deposit it to the government, and you cannot directly deposit.

My policy is on waiver mode, do I still have to pay applicable GST

GST will be liable to be paid at the time of payment of premium.

What is Kerala Flood Cess?

Government of Kerala has introduced Kerala Flood Cessfor the purpose of providing, reconstruction, rehabilitation and compensation needs which had arisen due to the massive flood that occurred in the State of Kerala in the month of August 2018, for a period of two years from the date of implementation.

What is the rate of Kerala Flood Cess (KFC)?

KFC to be levied @ 1% on the value of supply (taxable value). So, effectively, the GST rate on Life insurance products in the state of Kerala has increased to 19% from the current 18%.

What would be the revised effective GST rates post-implementation of Kerala Flood Cess?

Details of revised GST rates on Premium w.e.f 1st Aug 2019 onwards are mentioned below:

Type of Product

Existing GST rate

Proposed GST rate

Endowment - First Year

4.50%

4.75%

Endowment - Second Year

2.25%

2.375%

Single-Premium Annuity Products

1.80%

1.90%

Term Plan/Rider/Health

18.00%

19.00%

Charges on ULIP

18.00%

19.00%

Kerala Flood Cess is applicable to whom?

KFC is applicable to intra-state supplies of goods or services or both made by a taxable person to an unregistered person. Accordingly, this would apply on all policies issued or to be issued by Max Life in the state of Kerala to Policyholders residing in Kerala (B2C only and not registered under GST laws). In other words, it would be applicable wherein the Provider (Max Life policy issuance State) & Recipient (Policyholder) state is Kerala.

What would be the effective date of implementation of Kerala Flood Cess?

It would be implemented w.e.f 1st Aug 2019 onwards for the period of two years from the date of implementation.

Will KFC be paid in addition to the existing taxes?

Yes.KFC would be collected from customers in addition to existing GST. Therefore, w.e.f 1st Aug 2019, along with premium amount& existing GST amount customers have to remit additionally 1% of taxable premium on account of Kerala Flood Cess.

If the premium is paid before 1st Aug 2019, will KFC still be applicable?

If you pay your due premium for a policy on or before 31st July 2019, GST will be applicable at the prevailing rates. In case of an advance payment of premium for policies due after 31st July 2019, GST and KFC will be applicable hence differential unpaid amount arises on account of KFC if any, will have to be paid by the customer.

ARN:-Jan/Bg/60

Calculate Term Insurance Premium

Continue Reading

Continue Reading


#Life-Insurance
What to Expect from Your Life Insurance Agent or Advisor?

Read More



#Life-Insurance
Life Insurance - Frequently Asked Questions

Read More



#Life-Insurance

Why do you need Life Insurance?

Read More