Union Minister of Road Transport and Highways, Nitin Gadkari, has requested Finance Minister Nirmala Sitharaman to withdraw the 18 % goods and services tax (GST) imposed on life and medical insurance premiums.
Gadkari highlighted concerns in a recent letter raised by the Nagpur Division Life Insurance Corporation Employees Union, which had submitted a memorandum addressing issues within the insurance sector. Referring to the memo, Gadkari said that imposing GST on life insurance premiums equates to taxing the uncertainties of life. He argued that individuals who invest in life insurance to safeguard their families should not be burdened with additional taxes on their premiums.
‘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’, said Gadkari. He further added that the main issue raised by the union is related to the withdrawal of GST on life and medical insurance premiums.
For the unversed, both life insurance and medical insurance premiums are subject to an 18 % GST rate. He added, ‘Similarly, the 18 % GST on medical insurance premiums is proving to be a deterrent for the growth of this segment of business 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 premiums on priority as it becomes cumbersome for senior citizens as per rules with due verification’.
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