Letter to Sri Arunjaitly (Finance Minister) regarding ST
LIAFI-SG/CG-083/14 26TH,November 2014
Shri. Arun Jaitely,
Minister of Finance,
134, North Block,
NEW DELHI-110 001
Respected Sir,
Sub: Imposition of Service Tax on L.I.C. Policies-Reg
We would like to bring to your kind consideration the following few lines which would give an insight of the fact that imposing Service Tax on LIC Policies is not justified.
Life Insurance Policies are never bought in India, even today they are sold. Hence it is termed that “Life Insurance is a hard sale”. It is an overall feeling in the society that the premia paid are treated as an INVESTMENT
rather than risk cover. Though the insurance industry is opened a decade back the penetration of life insurance cover is hardly 20% of insurable population of India. This very fact indicates that life insurance selling is most difficult and life insurance cover is never a priority for Indian public.
rather than risk cover. Though the insurance industry is opened a decade back the penetration of life insurance cover is hardly 20% of insurable population of India. This very fact indicates that life insurance selling is most difficult and life insurance cover is never a priority for Indian public.
The awareness of insurance in India is very low. Indian public purchase insurance policies purely on the basis of its returns than the risk cover. When compared to other investments the return on life insurance policies is very low. It is becoming difficult for the Agents to close a sale with the low returns. When such is the position of life insurance MARKET the imposition of Service Tax further affects the returns to policyholders on their savings. The net maturity value and the returns are much less when compared to Bank deposits. Service Tax is not imposed for Bank deposits.
the imposition of Service Tax further affects the returns to policyholders on their savings. The net maturity value and the returns are much less when compared to Bank deposits. Service Tax is not imposed for Bank deposits.
We opine that the LIC Policyholder is taxed twice. The GOI is taking 10% of the surplus generated by LIC every year. This is the MONEY of policyholders only. Added to this they are paying Service Tax. The GOI is not receiving any amount from the premia collected by the private players. LIC is burdened with social responsibility of building India. This amount also belongs to policyholders.
of policyholders only. Added to this they are paying Service Tax. The GOI is not receiving any amount from the premia collected by the private players. LIC is burdened with social responsibility of building India. This amount also belongs to policyholders.
We request you to remove collection of Service Tax on LIC policies for the overall benefit of LIC Policyholders in particular and our Nation in general.
Thanking you, Sir
Sincerely yours,
For Life Insurance Agents Federation of India
Secretary General
POSTED BY SECRETARY,LIAF,COIMBATORE DIVISION ON 29/11/2014 AT 1.00PM
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