Nitin Gadkari urges FM Nirmala Sitharaman to withdraw 18 per cent GST on life insurance

Nitin Gadkari. File Pic

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, reported news agency PTI.

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.

"The main issue raised by the Union is related to the withdrawal of GST on Life and Medical Insurance Premium. Both life insurance and medical insurance premiums attract a GST rate of 18 per cent," the Road Transport and Highways Minister has written, reported PTI.

Referring to the memo, the 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 premium to purchase cover against this risk."

Further, he added that the main issue raised by the union is related to the withdrawal of GST on life and medical insurance premiums.

"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 per cent GST on medical insurance premiums is proving to be a deterrent to the growth of this segment of business, which is socially necessary. Therefore, they have urged withdrawal of GST as mentioned above," he said, reported PTI.

Gadkari said the union that met him also raised points related to differential treatment to savings by way of life insurance, re-introduction of the IT deduction for health insurance premiums and consolidation of public and sector general insurance companies, reported PTI.

Both life insurance and medical insurance premiums are subject to an 18 per cent GST rate.

He further said, "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," reported PTI.

"In view of the above, you are requested to consider the suggestion of withdrawal of GST on life insurance and medical insurance premium on priority as it becomes cumbersome for senior citizens as per rules with due verification," he said.

(With inputs from PTI)