Nitin Gadkari seeks removal of 18 per cent GST on Life, Health Insurance Premiums; writes to FM Sitharaman
New Delhi: Union Minister for Road Transport and Highways Nitin Gadkari has written to Finance Minister Nirmala Sitharaman to remove 18 per cent Goods and Services Tax (GST) imposed on life and medical insurance premiums.
Gadkari's appeal follows a memorandum from the 'Life Insurance Union' of Nagpur, his parliamentary constituency, regarrding problems faced by the insurance companies.
According to an IANS report, Nitin Gadkari, in a letter to the Finance Minister stated that the "main issue raised by the union is related to withdrawal of GST on Life and Medical Insurance Premium".
Also Read:IMA Kerala Liable to Pay GST on Supply of Goods and Services to its Members: HC
His letter mentions that the 18 per cent GST currently levied on life and medical insurance premiums tends to penalise individuals seeking to protect themselves and their families against life's uncertainties.
He contended that taxing life insurance premiums essentially taxes the very act of preparing for unforeseen circumstances, which is counter-productive to the objective of providing financial security.
The memorandum also expressed concerns that the 18 per cent GST on medical insurance premiums acts as a significant barrier to the growth of this crucial segment.
The high tax rate discourages individuals from investing in medical insurance, despite its crucial role in ensuring public health and financial stability during medical emergencies, Nitin Gadkari's letter states, adds IANS.
In addition to the GST issue, "The insurance union has also raised points related to differential treatment to savings by way of life insurance, the re-introduction of IT deductions for health insurance premiums, and the consolidation of public general insurance companies", the letter added.
Medical Dialogues team had earlier reported that Union Finance Minister Nirmala Sitharaman has allocated ₹90,958.63 crore for the healthcare sector in addition to ₹3,712.49 crore for the AYUSH Ministry in the budget for 2024-2025. The last year it was ₹80,517.62 crore for the Ministry of Health and Family Welfare, and ₹3,647.50 crore for the AYUSH Ministry.
