In a significant move, Nitin Gadkari, Minister for Road Transport and Highways, has written to Finance Minister Nirmala Sitharaman, urging the removal of the 18% GST on life and medical insurance premiums. This request follows a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union, which highlighted several critical issues affecting the insurance industry.
The Union’s primary concern is the current 18% GST rate on life and medical insurance premiums, which they argue effectively taxes life’s uncertainties. Gadkari echoed this sentiment in his letter, emphasizing that individuals who purchase insurance to safeguard their families against unforeseen events should not be burdened with such a tax. He pointed out that this tax diminishes the incentive for people to invest in insurance, thereby undermining its fundamental purpose.
The impact of the 18% GST on medical insurance is particularly troubling. Gadkari noted that this tax negatively affects the growth of the medical insurance sector, making it less accessible and affordable, especially for senior citizens who are already facing financial challenges. The high GST rate hampers the sector’s ability to provide financial protection during medical emergencies, which is its primary objective.
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