Union Minister Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to withdraw the Goods and Services Tax (GST) on premiums for life and medical insurance plans. This request comes amid widespread criticism of Budget 2024 from various quarters.
Gadkari's appeal follows a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union. In his letter to Ms Sitharaman, he highlighted the union's concern regarding the 18 per cent GST on life and medical insurance premiums.
"Levying GST on life insurance premium amounts to levying tax on the uncertainties of life," Gadkari wrote. “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 per cent GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business, which is socially necessary.”
He added that the union also raised issues related to the differential treatment of savings through life insurance, the reintroduction of income tax deductions for health insurance premiums, and the consolidation of public and sector general insurance companies.
"In view of the above, you are requested to consider the suggestion of withdrawing GST on life and medical insurance premiums on priority, as it becomes cumbersome for senior citizens with due verification along with other relevant points raised," Gadkari stated in his letter.
The minister's letter comes amid criticism from various quarters over the first Budget of the third Narendra Modi government, presented last week. The Opposition has accused the Centre of favouring states ruled by its key allies, the TDP and JDU, while some social media users have criticised high tax rates for the salaried class.
Finance Minister Sitharaman has dismissed these accusations, asserting that the Centre has provided funds to all states. She clarified that the omission of a state's name from the Budget speech does not imply exclusion from funding. The BJP has defended the Budget, claiming that its policy priorities aim for a long-term goal of 'Viksit Bharat'—making India a developed nation by 2047.
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