New Delhi: A day after Union minister of road transport & highways and senior Bharatiya Janata Party (BJP) leader Nitin Gadkari wrote a letter to Union finance minister Nirmala Sitharaman, lodging his reservations, West Bengal chief minister Mamata Banerjee on Thursday urged the Central government to roll-back Goods and Services Tax (GST) from life insurance and medical insurance premiums.
Banerjee said GST on insurance premiums affects people’s ability to take care of their basic needs. In her post on X, she said, “Our demand to Government of India is to roll back GST from life insurance and medical insurance premium on grounds of people’s health imperatives. This GST is bad because it adversely affects the people’s ability to take care of their basic vital needs.”
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A day ago, Gadkari, in his letter to Sitharaman, raised concerns of the Nagpur division Life Insurance Corporation Employees Union, which had submitted to him a memorandum regarding the issues of the insurance industry. Gadkari’s move was lauded by the Opposition parties.
Gadkari said, “Levying GST on life insurance premiums 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 protection to the family should not be levied tax on the premiums to purchase cover against this risk.”
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The West Bengal chief minister also threatened to protest if the government does not withdraw the “anti-people” GST. “If Government of India does not roll back the anti-people GST, we will be bound to hit the road,” CM Banerjee said.
Meanwhile, Congress MP Karti Chidambaram lauded Gadkari’s protest and said, “I am very happy that Union minister Gadkari has endorsed my demand that I made yesterday on the floor of the House to remove the 18% GST levied on health and life insurance premium.”
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Currently, both life and medical insurance premiums attract a GST of 18 percent.
According to Gadkari, GST on life insurance premiums should be removed because taxing life insurance is akin to taxing life’s uncertainties. “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,” Gadkari said in his letter dated July 28.
“Similarly, the 18 percent GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business which is socially necessary,” the minister said.
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While the life, general, and health insurance industries have been advocating for a reduction in GST on life and medical insurance premiums to 12%, Gadkari has taken a more ambitious step by seeking the complete removal of GST on both sectors.
In his letter, Gadkari also raised concerns about the unequal treatment of savings through life insurance, the potential reintroduction of Income Tax on health insurance premiums, and the consolidation of public sector general insurance companies.
The GST Council is scheduled to meet in August. The most recent meeting was held on June 22.
