Union Minister of Road, Transport and Highways Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to remove the 18 per cent Goods and Services Tax (GST) on life and medical insurance premiums as it leads to levying taxes on the uncertainties of life and restricts the sector’s growth, Moneycontrol reported on Wednesday, July 31.
“You are requested to consider the suggestion of withdrawal of GST on life and medical insurance premium on priority as it becomes cumbersome for the senior citizens,” Gadkari urged Sitharaman in a letter on July 28.
Currently, 18 per cent GST is charged on life and medical insurance premiums.
According to Gadkari, the tax on medical insurance premiums is restricting the growth of the industry and further impacting society.
“Similarly, the 18 percent GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business which is socially necessary,” Gadkari said.
The letter was a response to the Nagpur Divisional Life Insurance Corporation Employees Union, which, according to the Moneycontrol report, submitted a memorandum to the road and transport minister raising concerns about the problems faced by the insurance industry.
Nitin Gadkari is a Member of Parliament representing the Nagpur constituency in the Lok Sabha.
“Levying GST on life insurance premium amounts to levying tax on the uncertainties of life. The Union feels that the person who covers the risk of life’s uncertainties to give some protection to the family should not be levied tax on the premium to purchase cover against this risk,” Gadkari’s letter mentioned referring to the memo, the report said.
The union minister also highlighted the issue of “differential treatment of savings by way of life insurance, reintroduction of income tax deduction for health insurance premiums and consolidation of public sector general insurance companies.”
The GST Council, which last met on June 22 will next meet in August. The GST Council is a constitutional body that makes recommendations related to the implementation of the Goods and Services Tax (GST) in India.
