Senior BJP leader and Union Road Transport Minister Nitin Gadkari has written to his cabinet colleague, Union Finance Minister Nirmala Sitharaman, urging her to remove the 18% GST on life and medical insurance premiums.
The purported letter from Gadkari has been widely shared on social media. The letter is dated Saturday, July 28.
According to the letter, Gadkari received a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union regarding issues related to the insurance industry. The Union requested him to take the issue up with the Finance Minister.
In the letter to the Finance Minister, Gadkari said, "The main issue raised by the Union was about the withdrawal of GST on life and medical insurance premiums. Both life insurance and medical insurance premiums attract a GST rate of 18 percent. Levying GST on life insurance premiums amounts to taxing the uncertainties of life."
"The Union feels that the person who covers the risk of life's uncertainties to provide some protection to the family should not be taxed on the premium to purchase cover against this risk. Similarly, the 18% GST on medical insurance premiums is proving to be a deterrent to the growth of this segment of business, which is socially necessary. Therefore, they have urged the withdrawal of GST as mentioned above," Gadkari wrote.
Urging Finance Minister Sitharaman, he wrote, "You are requested to consider the suggestion of withdrawing the GST on life and medical insurance premiums on priority, as it becomes cumbersome for senior citizens per rules with due verification, along with other relevant points raised."
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According to a report by The Hindu Businessline published in February this year, the Parliamentary Standing Committee on Finance has recommended that GST on health insurance, particularly for senior citizens, should be lowered. It has simultaneously pitched for a level playing field between public and private sector insurance companies in terms of TDS on GST and participation in government-run insurance schemes.
