October 22, 2017

Financial services to be dearer post GST

The existing 15% service tax on financial services is all set to go up on implementation of GST with effect from the 1st July 2017, to 18%. The insurance companies, credit card providers and banks have already started alerting their customers to pay higher tax after the implementation of GST from July 1. ICICI Prudential Life Insurance, in email messages to its customers, has already started sanitizing their clientele regarding the premium payable on term policy and fund management charges on a ULIP, which will attract 18% GST post implementation of the new indirect tax regime. The confusion under GST is the tax being levied on branded food grains, pulses and agro commodities. In the meanwhile the Traders’ body, CAIT has written to Finance Minister Arun Jaitley saying that under the pretext of “branded” these items have been made taxable at 5% which will prove to be detrimental and in contradiction of the intention of the Government.

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