Nitin Gadkari, the minister of roads, transport, and highways, wrote to Nirmala Sitharaman, the minister of finance, requesting the removal of the 18% Goods and Services Tax (GST) from life and health insurance premiums.
According to Nitin Gadkari, the GST limits industry expansion and amounts to taxing life’s uncertainties. The 18% GST applies to both life and medical insurance premiums.
“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,” Nitin Gadkari wrote.
Nitin Gadkari said the union that met him raised points related to differential treatment to savings by way of life insurance, re-introduction of IT deduction for health insurance premium and consolidation of public and sector general insurance companies.
“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,” he added.
He continued, “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.”
This also points to “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 minister said.
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