Nitin Gadkari Urges Removal of 18% GST on Life and Medical Insurance Premiums

Union Minister Nitin Gadkari appeals to Finance Minister Nirmala Sitharaman to eliminate the 18% GST on life and medical insurance premiums, emphasizing the burden on policyholders and the insurance sector.

Key Points

• Nitin Gadkari requests the withdrawal of the 18% GST on life and medical insurance premiums.
• Concerns were raised by the Nagpur Division Life Insurance Corporation Employees Union.
• Gadkari argues that taxing life insurance premiums is akin to taxing life’s uncertainties.
• The 18% GST on medical insurance premiums is seen as a deterrent to the growth of this essential service.
• Gadkari emphasizes the burden on senior citizens and the necessity of policy review.

Union Minister of Road Transport and Highways Nitin Gadkari has formally requested Finance Minister Nirmala Sitharaman to withdraw the 18 percent goods and services tax (GST) imposed on life and medical insurance premiums. Gadkari’s appeal highlights the concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted a memorandum addressing issues within the insurance industry.

In his letter, Gadkari stated, “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.” He emphasized that the primary concern raised by the union pertains to the withdrawal of GST on both life and medical insurance premiums, which are currently subject to an 18 percent rate.

Gadkari further elaborated on the adverse impact of the GST on medical insurance premiums, stating, “Similarly, the 18 percent GST on medical insurance premiums is proving to be a deterrent for the growth of this segment of business which is socially necessary.” He highlighted that the high tax rate on these premiums burdens policyholders, particularly senior citizens, making it cumbersome for them under the current rules and verification processes.

In light of these concerns, Gadkari urged the Finance Minister to prioritize the consideration of withdrawing the GST on life and medical insurance premiums. This move, he argued, would alleviate the financial burden on policyholders and support the growth and accessibility of essential insurance services.