New Delhi, July 31, 2024
Union Minister for Road Transport and Highways Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to withdraw the 18 per cent Goods and Services Tax (GST) imposed on life and medical insurance premiums.
The minister took up the matter after receiving a memorandum on the issue from the ‘Life Insurance Union’ of Nagpur – the Parliamentary constituency he represents in the Lok Sabha.
Nitin Gadkari, in a letter to the Finance Minister stated that the “main issue raised by the union is related to withdrawal of GST on Life and Medical Insurance Premium”.
His letter mentions that the 18 per cent GST currently levied on life and medical insurance premiums tends to penalise individuals seeking to protect themselves and their families against life’s uncertainties.
He contended that taxing life insurance premiums essentially taxes the very act of preparing for unforeseen circumstances, which is counter-productive to the objective of providing financial security.
The memorandum also expressed concerns that the 18 per cent GST on medical insurance premiums acts as a significant barrier to the growth of this crucial segment.
The high tax rate discourages individuals from investing in medical insurance, despite its crucial role in ensuring public health and financial stability during medical emergencies, Nitin Gadkari’s letter states.
In addition to the GST issue, “the insurance union has also raised points related to differential treatment to savings by way of life insurance, the re-introduction of IT deductions for health insurance premiums, and the consolidation of public general insurance companies”, the letter added.(Agency)
