“The introduction of service tax of 3.09 per cent on traditional products is unnecessary; the insurance business has been on decline for the last three weeks”
Over 7,000 LIC agents from Tamil Nadu, Kerala and Puducherry assembled here on Friday to oppose the levy of service tax on insurance premium, with effect from January 1 and sought its immediate withdrawal.
The rally was spearheaded by Life Insurance Agents’ Federation of India Southern Zone president V. Ganeshan to raise awareness on the levy of service tax that was bound to give a blow to the public’s saving habit and to the livelihood of insurance agents.
Participating in the Golden Jubilee celebrations of southern zonal council meet, the Federation president H.M. Jain said, “At a time when we are asking the management to extend more benefits to the policyholders and introduce user-friendly policies, the introduction of service tax of 3.09 per cent on traditional products is unnecessary. It will pinch their pockets as it is an extra burden. This will force most of them to discontinue the policies. There are over 11.4 lakh LIC agents in the country and equal number of agents in the private sector. LIC has 30 crore policyholders and they should not be exploited in the name of new taxes.”Declining patronage
Federation secretary general N. Gajapathi Rao mentioned that the insurance business was on the decline for the last three weeks and said as a next step they would meet officials concerned during the second week of February seeking withdrawal of service tax.
In his welcome address, Mr. Ganeshan said the service tax would affect LIC’s business as more than 20 crore policyholders are from lower and middle-income groups.
“In the coming days, it might delay settlement of death claims or maturity claims and affect LIC reserves too,” he added.