TMC leader Derek O’Brien has urged Finance Minister Nirmala Sitharaman to “urgently review” and withdraw the 18 percent GST on health and life insurance premiums during the upcoming GST Council meeting.
“The 18 per cent Goods and Services Tax (GST) on health and life insurance premiums is a burden on 45 crore Indians comprising the middle-class,” O’Brien wrote to the finance minister on August 24.
These insurance schemes provide financial security during times of distress, may it be an illness, accident, or untimely death. It is our collective responsibility to ensure that all sections of society are able to afford this crucial social safety net, he said.
The TMC leader also expressed fear that levying a high GST rate on health and life insurance might lead to many citizens not opting for insurance schemes or even existing policyholders not renewing their policies.
He pointed out that while the issue was raised by the TMC and several other opposition parties in Parliament, West Bengal Chief Minister Mamata Banerjee wrote to the finance minister earlier this month and requested that the GST on insurance premiums be rolled back.
The TMC leader also referred to a letter by Union Road Transport and Highways Minister Nitin Gadkari in this regard.
Union Minister and senior BJP leader Nitin Gadkari earlier wrote to Union finance minister requesting her to withdraw the GST imposed on premiums for life and medical insurance plans following a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union.
Levying GST on life insurance premium amounts to levying tax on the uncertainties of life, Gadkari wrote in his letter.
“The Insurance Regulatory and Development Authority of India has set the target of ‘Insurance for All’ by 2047. The only way to achieve this is by repealing the exorbitant 18 percent GST rate on health and life insurance,” O’Brien said in his letter.
The demand for withdrawing GST on life and health insurance premiums was raised by several opposition parties in the Lok Sabha. RSP MP NK Premachandran had also moved an amendment seeking removal of the 18 percent GST on medical and life insurance premiums when the Finance Bill was being passed.
The amendment was not taken up, leading to several opposition parties staging a walkout from the Lower House. Sitharaman, who piloted the Finance Bill, had said any amendment in the GST had to be approved by the GST Council.