Union Minister Nitin Gadkari has made a compelling case to Finance Minister Nirmala Sitaraman, urging the withdrawal of the Goods and Services Tax (GST) on life and medical insurance premiums. This appeal follows a significant memorandum from the Nagpur Life Insurance Union, which categorizes GST on these premiums as a tax on life’s uncertainties and a barrier to the expansion of medical insurance.
Nitin Gadkari, in his role as the Minister for Road Transport and Highways, has formally communicated this pressing concern to the Finance Minister. In his detailed letter, he highlighted the critical issues brought forward by the Nagpur Divisional Life Insurance Corporation Employees Union, specifically addressing the detrimental impact of GST on the insurance industry.
The union’s memorandum underscores the 18% GST levied on both life and medical insurance premiums. This taxation, as Gadkari elaborates, effectively penalizes individuals who seek to mitigate life’s inherent uncertainties by securing insurance coverage. The argument posited is that taxing life insurance premiums equates to taxing the efforts of individuals to provide a safety net for their families.
Moreover, the 18% GST on medical insurance premiums is cited as a significant deterrent to the growth of this vital sector. Gadkari stressed that this high tax rate is particularly discouraging for the expansion of medical insurance, which plays a crucial role in ensuring social welfare.
The memorandum also addresses several other pertinent issues, including the need for differential treatment of savings through life insurance, the reintroduction of income tax deductions for health insurance premiums, and the consolidation of public sector general insurance companies. These points highlight the broader concerns within the insurance sector that necessitate urgent attention and reform.
In his letter, Gadkari emphasizes the importance of prioritizing the withdrawal of GST on life and medical insurance premiums. He argues that the current taxation system imposes unnecessary burdens, especially on senior citizens, complicating their access to essential insurance services.
The union’s plea, backed by Gadkari’s strong endorsement, calls for immediate reconsideration of GST policies to foster the growth of the insurance sector and to provide much-needed relief to individuals seeking to safeguard their lives and health through insurance.
In summary, Nitin Gadkari’s advocacy for the removal of GST on insurance premiums is not just a policy recommendation but a call to recognize and rectify the undue financial burden placed on those striving to secure their future and wellbeing through insurance. This initiative, if acted upon, could pave the way for a more robust and accessible insurance industry, benefiting society at large.
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