Union Minister of Road, Transport, and Highways, Nitin Gadkari, has called on Finance Minister Nirmala Sitharaman to abolish the 18% Goods and Services Tax (GST) levied on life and medical insurance premiums. This appeal, reported on July 31, was made in a letter dated July 28, where Gadkari expressed concerns over the impact of this tax on both the insurance sector and society at large.
In his letter, Gadkari emphasized that the current GST on insurance premiums effectively taxes the uncertainties of life, which can be burdensome, especially for senior citizens. He argued that removing this tax would not only alleviate financial pressure on individuals but also foster the growth of the insurance industry.
"Levying GST on life insurance premium amounts to levying tax on the uncertainties of life," Gadkari wrote. He further noted that the tax on medical insurance premiums acts as a deterrent to the growth of this vital industry, which plays a crucial social role by providing financial protection in times of medical emergencies.
The appeal was in response to concerns raised by the Nagpur Divisional Life Insurance Corporation Employees Union, which had submitted a memorandum to Gadkari. The union highlighted the challenges faced by the insurance industry, urging for a reconsideration of the GST on premiums and for measures to support the sector's growth.
Gadkari, who represents the Nagpur constituency in the Lok Sabha, also pointed out the differential treatment of savings through life insurance, the need to reintroduce income tax deductions for health insurance premiums, and the consolidation of public sector general insurance companies.
This issue is likely to be discussed at the next GST Council meeting in August. The GST Council, a constitutional body, is responsible for making recommendations on the implementation and modification of GST policies across India.
