Union Minister of Road Transport and Highways Nitin Gadkari has written to Finance Minister Nirmala Sitharaman, requesting the withdrawal of the 18 per cent goods and services tax (GST) on life and medical insurance premiums.
Gadkari's letter came in the light of a memorandum submitted by the Nagpur Division Life Insurance Corporation Employees Union, raising the issues of the insurance industry. Notably, Gadkari represents the Nagpur constituency in the Lok Sabha.
"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 premium to purchase cover against this risk," the Union Minister's letter was cited by news agency PTI.
He added that the union's main issue is related to the withdrawal of the GST on life and medical insurance premiums.
Gadkari noted that the 18 per cent GST on medical insurance premiums is proving to be a hindrance for the growth of this business' segment, which is "socially necessary".
"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 senior citizens as per rules with due verification," he said.
The issue of "differential treatment of savings by way of life insurance, reintroduction of income tax deduction for health insurance premiums and consolidation of public sector general insurance companes" was also highlighted by the Union Minister.
Notably, the GST council -- which met on June 22 -- will next convene in the month of August. The GST Council is a constitutional body consisting of the Union Finance Minister and representatives from all states and Union Territories. The council makes decision on various aspects of GST, including tax rates, exemptions and administrative procedures.
