State FMs agree in principle to negative list

 

The negative list will include services like funeral, burial and mortuary agencies, interest paid on deposits by banks, dividend on investments, passenger travel in public transport among others. The significance of the negative list is that all those services not included in the negative list would be liable to be taxed by the states

Bhopal: The Empowered Committee of State’s Finance Ministers on Goods and Services Tax (GST) on Monday agreed in principle to the concept of services tax based on the ‘negative list’ and suggested that the Centre could prepare such a list which would help widen the tax base, reports PTI.

The committee headed by deputy chief minister of Bihar Sushi Kumar Modi met here on Monday to deliberate on the concept paper of taxation of services based on the negative list.

“The panel has agreed in principle to the concept of negative list and the Union Government should prepare it and can also implement it from 1 April 2012 after resolving the state’s concerns in this regard,” Mr Modi told reporters on the first day of the two-day long meeting.

The committee suggested that all those items mentioned in the Constitution’s schedule II should be included in the negative list so that Centre cannot impose tax on them.

The committee also deliberated on defining ‘services’ and felt that all kinds of economic activities barring goods, money and immovable property should be considered as part of the services, he said.

The negative list will include services like funeral, burial and mortuary agencies, interest paid on deposits by banks, dividend on investments, passenger travel in public transport among others. The significance of the negative list is that all those services not included in the negative list would be liable to be taxed by the states.

Mr Modi said that at present service tax is imposed on 120 services and hoped that after the implementation of negative list, many more services would be brought under the purview of tax regime and will help in further widening the tax base.

Referring to the implementation of the proposed GST regime, he said that the matter is pending with the Standing Committee of the Finance Ministry and states like Uttar Pradesh, Tamil Nadu, Madhya Pradesh and Gujarat among others have major objections to its introduction.

He said states have estimated a loss of Rs19,000 crore in revenues after the Central Sales Tax was reduced (as part of the move towards GST regime). But so far the Centre has released only Rs6,393 crore to 13 states by way of compensation.

Mr Modi informed that the Union finance minister Pranab Mukherjee has called a pre-budget meeting of the states’ finance ministers on 18th January, during which they will raise all these issues.

The finance ministers of all states except the five poll-bound states attended Monday meeting, he said, adding finance ministry officials of the poll-bound states were present at the meeting.

 

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IRDA imposes Rs 2 lakh fine on MetLife Insurance

 

IRDA said “the insurer (MetLife) did not pay sufficient attention in promptly communicating the underwriting decision as well as in refunding the proposal deposits collected from the complainant within the prescribed timelines”

New Delhi: The Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs2 lakh on private sector insurer MetLife for failure to follow norms while issuing policy, reports PTI.

“IRDA is satisfied that there has been negligence on the part of the insurer (MetLife India Insurance Company) and consequently imposes a penalty of Rs2 lakh,” said an order issued by the regulator.

IRDA has passed the order in connection with the delay in communicating the status of life insurance policy to one Suresh Chukkapalli.

Under the IRDA regulations, an insurer is required to process a proposal with speed and efficiency and communicate the decision to the applicant within 15 days of the receipt of proposal.

IRDA said “insurer (MetLife) did not pay sufficient attention in promptly communicating the underwriting decision as well as in refunding the proposal deposits collected from the complainant within the prescribed timelines.”

 

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Insurers seek IRDA nod for 22 revised pension products

 

IRDA in November 2011 had asked all insurers selling pension products to disclose in the policy document maturity benefits for customers or else withdraw them from 1 January 2012. As per the guideline, policy documents must explicitly define assured benefit in case of death of the policyholder

New Delhi: Insurance companies have approached the Insurance Regulatory and Development Authority (IRDA) for review of 22 pension products fearing they may not be conforming to the regulator's guidelines pertaining to assured returns.

“Insurance companies had filed 22 revised products as on date out of which 21 products were filed only in the month of December 2011,” IRDA said.

IRDA in November 2011 had asked all insurers selling pension products to disclose in the policy document maturity benefits for customers or else withdraw them from 1 January 2012.

As per the guideline, policy documents must explicitly define assured benefit in case of death of the policyholder.

While filing the revised products, the insurers have also sought certain clarifications on the guidelines.

Clarifying the doubts in the event of the death of a policyholder, IRDA said “...during the term of the contract, the successor to the policyholder shall be entitled to receive a sum equal to the premium paid at the guaranteed rate of return”.

IRDA also said the insurer offering pension products shall guarantee either a non-zero rate of return on premiums paid or an absolute amount and it should be disclosed at the time of purchase of the policy.

There are 23 life insurance companies operating in India selling pension schemes.

 

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