GST on health, life insurance premiums amounts to “taxing the uncertainties of life”: Gadkari to Sitharaman

Levying GST on life insurance premiums amounts to levying tax on the uncertainties of life, writes Nitin Gadkari. File | Photo Credit: ANI

Union Minister of Road Transport and Highways Nitin Gadkari has written to Finance Minister Nirmala Sitharaman, requesting her to withdraw the 18% goods and services tax (GST) on life and medical insurance premiums.

In his letter dated July 28, Mr. Gadkari raised the concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted a memorandum to him regarding the issues of the insurance industry. Mr. Gadkari represents the Lok Sabha constituency of Nagpur.

Referring to their memo, Mr. Gadkari said that “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 premiums to purchase cover against this risk.”

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

“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. 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,” he wrote in his letter.

The Union had also raised concerns related to the differential treatment of savings through life insurance, the re-introduction of income tax deduction for health insurance premiums, and the consolidation of public sector general insurance companies, Mr. Gadkari said.