Aug 01, 2024
Referring to the memo, the minister said, “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.”
New Delhi: Union Minister of Road Transport and Highways Nitin Gadkari has requested Finance Minister Nirmala Sitharaman to withdraw the IS per cent goods and sewices tax (GST) on life and medical insurance premiums. In his letter to the Finance Minister, Gadkari raised concerns of the Nagpur Division Life Insurance Corporation Employees Union, which had submitted to him a memorandum regarding the issues of the insurance industrY.
Referring to the memo, the minister said, “Levying GST on life insurance premiums amounts to levying tax on the unceltainties 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.”
Further, he added that the main issue raised by the Union is related to the withdrawal of GST on life and medical insurance premiums.
Gadkari also pointed out that 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 IS per cent GST rate.
He further said, “Similarly, the IS 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 clue verification,” he said.
Source: Economic Times