“Tax on Life’s Uncertainties…”: Nitin Gadkari writes to Finance Minister Nirmala Sitharaman requesting withdrawal 18% GST on life and medical insurance premiums

Nitin Gadkari, the Minister of Highways, Road, and Transport, has written a letter to Union Finance Minister Nirmala Sitharaman requesting her to remove the 18% Goods and Services Tax (GST) on life and medical insurance premiums. This request comes after he received a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union. Gadkari stated that the GST on insurance premiums essentially taxes individuals for trying to mitigate life's uncertainties, which hinders the growth of the insurance sector.

“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. 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,” wrote the Highways, Road and Transport Minister in his letter.

Gadkari said that the Nagpur Divisional Life Insurance Corporation Employees Union met with him and raised points related to differential treatment of savings by way of life insurance, reintroduction of income tax deduction for health insurance premiums and consolidation of public sector general insurance companies. "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,” wrote Nitin Gadkari.

Nitin Gadkari's letter comes at a time when the Union Budget 2024 is facing criticism from various quarters. The Opposition has labeled it as an "appeasement budget," alleging favoritism towards Bihar and Andhra Pradesh highlighting significant fund allocations. In response, Finance Minister Nirmala Sitharaman defended the budget, stating that all states have received funding. The BJP has highlighted the budget's long-term vision for a "Viksit Bharat" or developed India by 2047, showcasing its policy priorities.​