Nitin Gadkari writes to FM Sitharaman, seeks withdrawal of 18 percent GST on life, medical insurance premium

Srinagar, July 31: Union Minister Nitin Gadkari Wednesday wrote a letter to Finance Minister Nirmala Sitharaman, seeking a withdrawal of the 18 percent Goods and Services Tax (GST) that has been levied on life and medical insurance premiums.

In his letter to the Finance Minister, Gadkari raised concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted to him a memorandum regarding the issues of the insurance industry.

“Main issue raised by the Union is related to withdrawal of GST on life and medical insurance premium. Both life insurance and medical insurance premiums attract a GST rate of 18 per cent. Levying GST on life insurance premium amounts to levying tax on the uncertainties of life,” the Road Transport and Highways Minister wrote.

“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. Similarly, the 18% GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business, which is socially necessary. Therefore, they have urged withdrawal of GST as mentioned above,” he added.

“The Union has also raised points related to Differential Treatment to Savings by way of Life Insurance, re-induction of IT deduction for health insurance premium and consolidation of public and sector general insurance companies. Each point is explained in details in the memorandum,” the letter mentioned.

He further stated, “In view of the above, 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 as per rules with due verification along with other relevant points raised”.