Mumbai: LIC Managing Director Ratnakar Patnaik on Monday urged the government to exempt the life insurance sector from GST, saying such a move would allow insurers to claim input tax credit (ITC).
He welcomed the Centre’s decision to eliminate GST on individual life and health insurance premiums from September 22, 2025, but noted that placing the sector under the “GST exempt” category would offer greater benefits.
Patnaik also asked policymakers to treat insurers’ excess hold-ings of government securities and state development loans as housing and infrastructure investments, arguing that these funds are ultimately used for such purposes. He said insurers currently invest just over 9 per cent in these sectors, below the mandated 15 per cent.
Patnaik further called for reviewing the three-year-old rule that taxes maturity proceeds of policies with annual premiums above Rs 5 lakh, suggesting the limit be raised to Rs 10 lakh to boost policy uptake and fund mobilisation.
He reiterated LIC’s commitment to supporting national development through investments in corpo-rate bonds and government securities.
At the same event, NSE MD and CEO Ashishkumar Chauhan said increasingly stringent rules for foreign portfolio investors were discouraging them, calling current data requirements “intrusive.” He added that India must present market statistics more accurately, noting that U.S. stock option markets far exceed India’s in traded premiums.