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In a recent letter to Finance Minister Nirmala Sitharaman, Union Minister Nitin Gadkari has called for the withdrawal of Goods and Services Tax (GST) imposed on life and medical insurance premiums. The request follows a memorandum submitted by the Nagpur Divisional Life Insurance Corporation Employees Union, which has raised concerns about the tax’s impact.
Gadkari’s letter highlights the union’s objection to the 18% GST levied on both life and medical insurance premiums. The minister argues that imposing GST on life insurance premiums amounts to taxing the inherent uncertainties of life, which undermines the protection these policies are intended to offer.
“The Union feels that individuals who invest in life insurance to safeguard their families against life’s uncertainties should not be burdened with a tax on their premiums,” Gadkari wrote. He also noted that the GST on medical insurance premiums is a deterrent to the growth of this essential segment, which is crucial for public health.
The memorandum also included requests for several other changes, including differential treatment for savings through life insurance, the reintroduction of income tax deductions for health insurance premiums, and the consolidation of public sector and general insurance companies.
Gadkari’s plea to withdraw GST on insurance premiums comes amid broader criticism of Budget 2024, which has faced scrutiny from various quarters. Critics have pointed out high tax rates and alleged favoritism towards states governed by the BJP’s key allies, such as the Telugu Desam Party (TDP) and Janata Dal (United) [JDU].
In response, Finance Minister Sitharaman has dismissed opposition claims, asserting that the Centre has allocated funds equitably across states, regardless of whether they were explicitly mentioned in her Budget speech. The BJP has defended the Budget, emphasizing its long-term goal of transforming India into a developed nation by 2047.
Sources By Agencies
