New Delhi: Minister of Road Transport and Highways, Nitin Gadkari wrote to Finance Minister, Nirmala Sitharaman seeking the withdrawal of 18% Goods and Services Tax (GST) on life and medical insurance premiums. Gadkari wrote to Finance Minister Nirmala Sitharaman on July 28, arguing that taxing insurance premiums is essentially taxing lifes unpredictabilities, which stifles the insurance industrys development.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 wrote.Gadkari seeks GST reliefAs of now, life and medical insurance premiums are currently taxed at a rate of 18% under the Goods and Services Tax (GST) regime. Gadkari also noted that the 18% GST on medical insurance premiums is holding back the growth of this important industry. Gadkaris letter replied to a detailed petition from the Nagpur Divisional Life Insurance Corporation Employees Union, which had pointed out the many problems facing the insurance sector.In the Lok Sabha, representing Nagpur, Gadkari argues that imposing GST on life insurance premiums is tantamount to taxing the unpredictabilities of life. He emphasized that individuals seeking to secure their families against lifes uncertainties should not be burdened with taxes on the premiums paid for such protection.Gadkari highlights insurance sector issuesGadkari pointed out that the union also noted differential treatment of savings by way of life insurance, reintroduction of the income tax deduction for health insurance premiums and consolidation of public sector general insurance companies.Gadkari highlighted that the union also raised concerns about the discriminatory treatment of life insurance savings, the need to reinstate income tax deductions for health insurance premiums and the proposed consolidation of public sector general insurance companies.The GST Council, tasked with making tax-related decisions, is set to meet in August. Its most recent meeting took place on June 22.
