Union Minister Nitin Gadkari (File photo/PTI)
According to Gadkari, GST on life insurance premiums should be removed because taxing life insurance is akin to taxing life’s uncertainties.
Road and Transport Minister Nitin Gadkari has written to Finance Minister Nirmala Sitharaman, urging her to consider removing the Goods and Services Tax (GST) on life and medical insurance. He argued that taxing medical insurance hinders the growth of this socially important sector.
Currently, both life and medical insurance premiums attract a GST of 18 percent.
The letter was in response to a memorandum submitted by the Nagpur Divisional Life Insurance Corporation Employees Union, which highlighted the problems faced by the industry, Moneycontrol reported.
According to Gadkari, GST on life insurance premiums should be removed because taxing life insurance is akin to taxing life’s uncertainties.
“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 said in his letter dated July 28.
“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,” the minister said.
Complete Removal
While the life, general, and health insurance industries have been advocating for a reduction in GST on life and medical insurance premiums to 12%, Gadkari has taken a more ambitious step by seeking the complete removal of GST on both sectors.
In his letter, Gadkari also raised concerns about the unequal treatment of savings through life insurance, the potential reintroduction of Income Tax on health insurance premiums, and the consolidation of public sector general insurance companies.
The GST Council is scheduled to meet in August. The most recent meeting was held on June 22.
