Union Minister Nitin Gadkari wrote to Finance Minister Nirmala Sitharaman, demanding the elimination of the present 18% Goods and Services Tax (GST) on life and medical insurance premiums.
Nitin Gadkari’s Letter to Finance minister Nirmala Sitharaman
In the letter addressed by Nitin Gadkari to the Finance Minister Nirmala Sitharaman he said: “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 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,” Gadkari added.
The Union has made many recommendations, including the granting of differential treatment for savings through life insurance policies. They have also lobbied for the reintroduction of income tax deductions for individual health insurance premiums.
Furthermore, the Union has recommended consolidating public and private sector general insurance businesses in order to streamline operations and improve insurance industry efficiency.
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