Gadkari Urges Sitharaman to Withdraw 18% GST on Life and Medical Insurance Premiums
Gadkari Urges Sitharaman to Withdraw 18% GST on Life and Medical Insurance Premiums
New Delhi, July 31, 2024 – In a significant move aimed at providing financial relief to citizens, Road Transport and Highways Minister Nitin Gadkari has written to Finance Minister Nirmala Sitharaman, urging the withdrawal of the 18% Goods and Services Tax (GST) levied on life and medical insurance premiums.
In his letter, Gadkari emphasized the critical role that life and medical insurance play in the financial stability and security of families across India. He highlighted that the high GST rate on insurance premiums is a substantial burden for policyholders, especially in the context of rising healthcare costs and the economic uncertainties brought about by the COVID-19 pandemic.
”Insurance is not just a financial product but a necessity that provides a safety net for families in times of crisis. The current 18% GST on these premiums makes it unaffordable for many, thereby defeating the purpose of widespread insurance coverage,” Gadkari wrote.
The minister pointed out that reducing or eliminating GST on insurance premiums would encourage more people to invest in life and medical insurance, thus ensuring broader financial protection for citizens. He also noted that such a move would align with the government’s broader goal of enhancing social security and financial inclusion.
Gadkari’s appeal to Sitharaman comes at a time when the government is actively seeking measures to boost the economy and provide relief to the common man. The reduction of GST on essential services like insurance could be seen as a step in this direction.
Industry experts have lauded Gadkari’s initiative, stating that it could lead to increased insurance penetration in the country. “Removing GST on insurance premiums would make policies more affordable and accessible, especially for the lower and middle-income groups,” said Rajeev Kumar, an insurance analyst.
The insurance sector has also welcomed the proposal, expressing hope that the finance ministry will consider the recommendation favorably. “We have been advocating for lower taxes on insurance products for a long time. This initiative by Minister Gadkari is a significant step towards achieving that goal,” said Anil Kumar, CEO of a leading insurance company.
The finance ministry has yet to respond to Gadkari’s letter, but sources indicate that the proposal will be examined carefully given its potential impact on the economy and the welfare of the citizens.