Union Minister Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to abolish the 18 per cent Goods and Services Tax (GST) on life and medical insurance premiums.
In a letter dated July 28, Gadkari argued that taxing these premiums is akin to taxing life’s uncertainties, which hampers the growth of the insurance sector.
“Please consider prioritizing the removal of GST on life and medical insurance premiums, as it poses a burden for senior citizens,” Gadkari wrote.
At present, both life and medical insurance premiums are subject to an 18per cent GST.
“The 18per cent GST on medical insurance premiums is a major obstacle to the growth of this socially necessary business,” he added.
Gadkari’s appeal was a response to a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union, which highlighted various industry challenges.
As the Lok Sabha representative for Nagpur, Gadkari voiced the union’s concerns, stating, “Taxing life insurance premiums means taxing life’s uncertainties. The Union believes that individuals who secure their families against life’s risks should not be taxed on the premiums they pay.”
Gadkari also mentioned that the union called attention to “the differential treatment of life insurance savings, the need to reintroduce income tax deductions for health insurance premiums, and the consolidation of public sector general insurance companies.”
The GST Council, which handles tax-related decisions, is set to meet in August. The council’s last meeting was held on June 22.
