The non-life insurance industry is looking for centralised registration facility and comparatively lower rates for a smooth implementation of GST, a senior official from the sector said.
Goods and Services Tax (GST), which seeks to turn India into a single market for the first time, is likely to be implemented by the Government during the next fiscal.
“In the industry, we are looking for centralised registration facility and lower rates for the implementation of GST,” SBI General Insurance SVP and CFO Rikhil K Shah told PTI.
The lower rate demand is mainly for making the insurance premium affordable, he added. “The issue of GST implementation will be discussed during the General Insurance Council’s meeting on February 17 in Mumbai,” said the Council’s Secretary General, R Chandrasekaran.
“The idea is to take a stock of the GST update for the industry and its preparedness for implementation of GST,” he added.
According to Chandrasekaran, the meeting will also discuss the industry’s preparedness for Ind-AS (Indian accounting standards), to be implemented from April 1, 2018.
Apart from the Chief Financial Officers of various non-life insurance companies, the meeting will be attended by some consultants who will be making some presentation on the Ind AS, he said.
Talking about SBI General’s preparedness for GST implementation, Shah said the company, in accordance with the Irdai notification, had set up a committee to carry out the smooth implementation of the new accounting system.
“We have appointed an external consultant to manage the implementation project and effective transition from the current accounting practice. We had initiated the process of implementation well in advance to align resources and meet the deadline,” he said.
“To ensure that challenges and problems which will be faced in the conversion exercise are detected at an early point of time, we will be having an appropriate strategy, planning and execution of the project,” he added.
As Ind AS focuses more on the concepts of substance over form and fair valuation, the balance sheet numbers of the insurers would reflect a fairer picture.
According to Shah, “on our preliminary assessment, we feel that fair valuation of investments will increase the balance sheet size.”