India 18% GST on banking & insurance
India has confirmed plans to bring banking and insurance services within the net of the new Goods and Services Tax (GST), due to be implemented on 1 July 2017. This will increase taxes on financial transactions, which are currently subject to VAT.
Financial services are VATable today at about 15%. New GST rates published last week will raise this to 18% GST on services including: credit card payments, fund transfer, ATM transactions, processing fees on loans and insurance premiums. Financial services providers will have to make a market decision on whether to pass some or all the 3% rise.
Banks will have to register all branches for GST with the tax authorities to charge, report and remit the new indirect tax.
Life insurance will by GST exempt, as it is for VAT today.
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