Road transport and highways minister Nitin Gadkari has urged finance minister Nirmala Sitharaman to withdraw the 18% goods and services tax (GST) on life and medical insurance premiums.In a letter to the finance minister, dated July 28, Gadkari flagged concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted a memorandum regarding the issues of the insurance industry to the minister.
“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,” the minister said referring to the submission made by the union.
According to the letter, the Union has also raised issues related to differential treatment to savings through life insurance, re-introduction of income tax deduction for health insurance premiums and consolidation of public sector general insurance companies.
Both life insurance and medical insurance premiums are subject to an 18% GST rate.