Road Transport and Highways Minister Nitin Gadkari has written a letter to Finance Minister Nirmala Sitharaman demanding withdrawal of 18 percent Goods and Services Tax (GST) on insurance premium of life insurance and health insurance. Citing the letter, the report claimed that Nitin Gadkari said that GST is equivalent to imposing tax on the uncertainties of life. This will stop the growth of this sector.
According to Hindustan Times, Nitin Gadkari has written in his letter to Sitharaman, “You are requested to consider on priority basis the suggestion to withdraw GST on life and health insurance premium, as it becomes burdensome for senior citizens.” He added, “Similarly, 18 percent GST on health insurance premium is proving to be a hindrance to the growth of this segment which is socially essential.”
Imposing GST is equivalent to imposing tax on the uncertainties of life
He said, “Levying GST on life insurance premium is tantamount to taxing the uncertainties of life. The Union 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 for purchasing the cover against this risk.”
“It also points to differential treatment of savings through life insurance, reintroduction of income tax deduction for health insurance premium and consolidation of public sector general insurance companies,” Gadkari said.
Criticism about the budget
Gadkari has written this letter to the Finance Minister at a time when the first budget of the third term of the Narendra Modi government last week is being criticized by many quarters. According to NDTV, while the opposition has accused the Center of being generous only towards its key allies TDP and JDU ruled states, a section of social media users have pointed to the high tax rate for the salaried class. The Finance Minister rejected the opposition’s allegations and said that the Center has provided funds to all the states. He said that if a state is not named in the budget speech, it does not mean that it is not covered.
