(L-R) Nirmala Sitharaman and Nitin Gadkari.
Credit: PTI Photos
New Delhi: Union Minister of Road Transport and Highways Nitin Gadkari has requested Finance Minister Nirmala Sitharaman to withdraw the 18 per cent goods and services tax (GST) on life and medical insurance premiums.
Referring to a plea received from the Nagpur Division Life Insurance Corporation Employees Union on imposition of GST on life and medical premiums, the Road Transport Minister said, "Levying GST on life insurance premiums 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 protection to the family should not be levied tax on the premiums to purchase cover against this risk."
Letter from Gadkari to FM
Credit: X/@sabarisec
Both life insurance and medical insurance premiums are subject to an 18 per cent GST rate.
Gadkari also pointed out that the Union has also raised issues related to differential treatment to savings by way of Life Insurance, re-introduction of income tax deduction for health insurance premiums and consolidation of public sector general insurance companies.
"Similarly, the 18 per cent GST on medical insurance premiums is proving to be a deterrent for the growth of this segment of business which is socially necessary," Gadkari said.
"In view of the above, you are requested to consider the suggestion of withdrawal of GST on life and medical insurance premiums on priority as it becomes cumbersome for senior citizens as per rules with due verification," he said.
Separately, Congress MP Karti Chidambaram said he is glad that Union minister Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to remove GST on insurance, a suggestion he made in Lok Sabha during the Budget debate.
"We are a very under-insured country, and we must encourage people to insure themselves. By levying GST you are making the premiums expensive. You must treat insurance not only as a social cover but also as a mode of saving. So they should remove the GST," he told media persons.
Chidambaram shared on X a video of his speech made in Lok Sabha on Tuesday, where he demanded for the GST on insurance to be removed.