Lakhs of insurances in the country Property buyers may get relief in the coming days. In fact, Road Transport and Highways Minister, Nitin Gadkari has written a letter to Finance Minister Nirmala Sitharaman to abolish the GST on insurance policy premium. If, accepting the demand of this letter, the Finance Minister abolishes the GST on insurance premium, then it will provide relief to millions of people because the premium will be reduced. Gadkari said in his letter that he has written this letter to the Finance Minister after the memorandum of Nagpur Mandal Life Insurance Corporation Employees Union. The minister has written in the letter that the main issue raised by the union is related to the withdrawal of GST on life and medical insurance premium.
GST is levied at the rate of 18 percent
Currently, GST is levied at the rate of 18% on premiums of both life insurance and health insurance. The letter states that levying GST on life insurance premium is akin to taxing the uncertainties of life. He said, “The association believes that a person who covers the risk of uncertainties of life to give some security to the family should not be taxed on the premium paid for buying the cover for this risk. Similarly, 18% GST on medical insurance premium is proving to be a hindrance to the growth of this business, which is socially necessary. Therefore, they have urged to withdraw the GST levied on insurance premium.”
Consider abolishing GST soon
Gadkari said the unions that met him also raised issues related to differential treatment for savings through life insurance, re-introduction of IT deduction for health insurance premium and integration of public and sector general insurance companies. “In view of the above, you are requested to consider on priority basis the suggestion to withdraw GST on life and medical insurance premium as it becomes cumbersome for senior citizens as per the rules, along with proper verification on other relevant points,” the former BJP chief said in the letter.
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