Financial sector firms pitch for tax break, GST reduction at pre-Budget meeting

New Delhi: Financial sector players on Monday demanded reduction of GST on term insurance for increasing its penetration and streamlining KYC norms to expand financial inclusion.

In a pre-Budget meeting with Finance Minister Nirmala Sitharaman, representatives of financial sector and capital markets also highlighted the need for governance changes in public sector banks (PSBs) with special focus on recommendations of the P J Nayak Committee.

Speaking to reporters after the meeting, Finance Secretary Rajiv Kumar said a number of suggestions came from various financial sectors including banks, insurance companies, non-banking financial companies (NBFCs) and housing finance companies.

"There were taxation suggestions. We have taken note of it. Taxation concern would be addressed in given fiscal space. Inflation is still benign, credit growth is also happening. All these factors will be kept in mind," he said.

To give a boost to Indian markets, the representatives from financial sector and capital markets submitted several suggestions concerning enhancing credit offtake from banks, governance, risk capital issues, improving functioning and alleviating stress among NBFCs, an official statement said.

Besides, they made a case for promoting leasing by reducing GST, reduction of GST rates on term insurance for increasing its penetration and to provide easier credit to digitally active users by streamlining KYC norms, it said.

Demand for GST reduction comes days ahead of the GST Council meeting to be scheduled on December 18.

Suggestions were also received for enhancing support from private banks to the Stand-Up India scheme, it added.