"Remove 18% GST from insurance premiums," Gadkari to Sitharaman

Union Minister Nitin Gadkari has requested Finance Minister Nirmala Sitharaman to withdraw the 18 per cent Goods and Services Tax (GST) levied on life and medical insurance premiums. Gadkari expressed his concerns in a letter on Wednesday, highlighting the issues raised by the Nagpur Division Life Insurance Corporation Employees Union.

In his letter, Gadkari mentioned that the Union had submitted a memorandum about the problems facing the insurance industry. “Main issue raised by the Union is related to withdrawal of GST on life and medical insurance premium. Both life insurance and medical insurance premiums attract a GST rate of 18 per cent. Levying GST on life insurance premium amounts to levying tax on the uncertainties of life,” the Road Transport and Highways Minister wrote, referring to the memo.

Gadkari emphasized the Union's view that taxing life insurance premiums is unfair because it penalizes people for protecting their families against life's uncertainties. He added that the 18 per cent GST on medical insurance premiums is hindering the growth of a socially necessary sector. “The Union feels that the person who covers the risk of life’s uncertainties to give some protection to the family should not be levied tax on the premium to purchase cover against this risk. Similarly, the 18% GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business, which is socially necessary. Therefore, they have urged withdrawal of GST as mentioned above,” he added.

Gadkari further appealed to the Finance Minister, highlighting the challenges faced by senior citizens due to these taxes. “In view of the above, you are requested to consider the suggestion of Withdrawal of GST on Life and Medical Insurance Premium on priority as it becomes cumbersome for the senior citizens as per rules with due verification along with other relevant points raised,” he stated.

The appeal from Gadkari brings attention to the financial burden of GST on insurance premiums and calls for reconsideration to support the insurance sector and provide relief to policyholders.