India, Oct. 7 -- The insurance sector was among the biggest gainers of GST 2.0. Rather, the insured were the biggest beneficiaries, as the tax rate on premiums was slashed from 18 per cent to zero. But, bizarre as the ways of the bureaucracy are, the move hurt the insurers. Earlier, they were allowed to refund or adjust the 18 per cent GST paid on commissions and brokerages to the distributors and agents.

Now, the Government has refused the refunds. It withdrew the Input Tax Credit (ITC) that allowed it. Caught in a tax quagmire, private insurers found a win-win solution. They passed on the premiums' benefit to the insured, and the extra tax burden on commissions to the agents. Most insurers issued notices that commission rates will be r...