In response to criticism of Budget 2024 from various sources, Union Minister and senior BJP leader Nitin Gadkari has urged Finance Minister Nirmala Sitharaman to reconsider and withdraw the GST levied on premiums for life and medical insurance plans.
In his letter, Mr. Gadkari stated that he is reaching out to the Finance Minister in response to a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union.
“The primary concern raised by the Union is the removal of GST on life and medical insurance premiums. Currently, both life insurance and medical insurance premiums are subject to an 18 percent GST rate. Imposing GST on life insurance premiums effectively taxes the uncertainties of life,” the Road Transport and Highways Minister wrote.
“The Union feels that the person who covers the risk of life’s uncertainties to give some protection to the family should not be levied tax on the premium to purchase cover against this risk. Similarly, the 18% GST on medical insurance premium is proving to be a deterrent for the growth of this segment of business, which is socially necessary. Therefore, they have urged withdrawal of GST as mentioned above,” he has added.
Mr Gadkari said the union that met him also raised points related to differential treatment to savings by way of life insurance, re-introduction of IT deduction for health insurance premium and consolidation of public and sector general insurance companies.
“In view of the above, 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 as per rules with due verification along with other relevant points raised,” the former BJP chief has said in his letter to Ms Sitharaman.
Mr Gadkari’s letter to the Finance Minister comes amid criticism from several quarters over the first Budget of the third Narendra Modi government, presented last week. While the Opposition has accused the Centre of being generous only to states ruled by its key allies TDP and JDU, a section of social media users have pointed to high tax rates for the salaried class.
The Finance Minister has trashed the Opposition’s charge, saying the Centre has provided funds to all states. She has said that if the name of a state is not mentioned in the Budget speech, it does not mean it is not covered. The BJP has said policy priorities of the Budget suggest that it has a long-term goal of ‘Viksit Bharat’ — making India a developed nation — by 2047.